When Abhishek Kumar got married, buying a home felt like the obvious next step.
He and his wife had done everything that India tells young professionals to do. They built successful careers, earned well, and together had a combined annual income of more than Rs 20 lakh.
A home in Gurgaon, close to their workplaces and the life they had built there, seemed like a realistic dream.
Then came the house hunt.
For nearly eight months, the couple searched for a home across Gurgaon. The apartments they liked in the locations they preferred were often priced between Rs 4 crore and Rs 5 crore. The numbers simply did not make sense.
Eventually, they moved farther away and purchased a home near Manesar for around Rs 1.5 crore. Even that purchase was not possible entirely on their own. They needed financial support from their parents. The compromise was a significantly longer daily commute to Delhi and central Gurgaon.
Abhishek does not regret the decision. He is happy with his home.
But his journey raises a question that is increasingly troubling India’s salaried class: if a young couple earning more than Rs 20 lakh annually has to move away from the city where they work and depend on parental support to buy a home, what does affordability mean for everyone else?
For decades, buying a house was considered the ultimate sign of financial security in India. That aspiration remains unchanged.
What has changed is the maths behind it.
Home prices in many Indian cities are rising much faster than salaries, forcing buyers to take bigger loans, move farther away from job centres, depend on family wealth or postpone the decision to buy a home altogether.
The answer, increasingly, is yes.
According to Samir Jasuja, Founder and CEO of PropEquity, urban household incomes in India have been growing at around 5% to 6% annually. Residential property prices, however, have risen at a much faster pace in several cities.
Gurugram is one of the most striking examples.
Between 2021 and 2025, residential prices in Gurugram grew at around 15.5% to 16.5% annually, effectively more than doubling within four years.
Bengaluru witnessed annual price growth of around 11% to 12%, while other major cities including Mumbai, Pune, Chennai and Hyderabad also recorded strong appreciation.
The impact of this gap is clearly visible in affordability data.
According to PropEquity, a household in Gurugram now requires around 15.42 years of gross income to buy an average home. In Mumbai, the figure is around 15.06 years.
In Hyderabad, it takes around 7.49 years of income to purchase an average home. Bengaluru requires around 4.90 years, while Pune requires around 3.60 years.
The
In Gurugram, the EMI required to purchase an average home can amount to around 160% of a household’s monthly income. In Mumbai, it is around 157%.
In simple terms, even before paying for food, healthcare, education or other daily expenses, an average family cannot realistically manage such an EMI.
India’s overall price-to-income ratio has increased from around 6.6 times in 2020 to around 7.5 times in 2026.
Jasuja says part of this increase is also due to changing preferences after the pandemic, with buyers increasingly choosing larger homes and better configurations.
The affordability challenge is not only about whether a family can get a home loan. The bigger question is whether they can comfortably afford the financial burden that comes with it.
Abhishek Kumar, Sebi-registered investment adviser and founder of SahajMoney, says a one-third of a person’s gross monthly income.
“Adhering to this threshold ensures that monthly cash flows remain flexible and manageable even when facing fluctuating floating interest rates or unexpected personal expenditures,” he says.
However, rising property prices are forcing many buyers to stretch beyond these limits.
“Many buyers are taking on too much financial risk by stretching their debt-to-income ratios well beyond recommended limits to acquire premium properties,” Kumar says.
He adds that the sharp rise in property prices over recent years has pushed buyers towards larger loans, making them more vulnerable to interest rate increases or disruptions in income.
is no longer restricted to cities like Mumbai, Gurugram or Bengaluru.
Thirty-one-year-old Brigu Pathak experienced a similar reality in a Tier-II city.
He was not searching for a luxury property. He simply wanted a good 3 BHK home in the city where his family had lived for years.
The price was the problem.
A suitable 3 BHK was difficult to find for less than Rs 80 lakh. Once registration charges, taxes and other costs were added, the total cost was close to Rs 1 crore.
His family considered buying the home because his father was approaching retirement and wanted to continue living in the city.
Even after taking his father’s financial support into account, the family realised they would have to liquidate nearly all their accumulated capital to buy the property.
With his younger sisters’ marriages expected in the next two to three years, the family eventually decided against purchasing the home.
For Pathak, the changing conversation around housing itself reflects how expensive homes have become.
“This conversation has only started because homes have gotten so expensive. Earlier, nobody used to talk like this,” he says.
The two stories highlight another emerging trend: the increasing role of family support in homeownership.
Abhishek required parental assistance to buy his house. Brigu’s family also had to consider using decades of savings to enter the housing market.
Dr Manoranjan Sharma, Chief Economist at Infomerics Ratings, says this pattern has already been observed globally.
“In many advanced economies, inherited wealth accounts for around 10% of national income annually, strengthening the influence of family background on housing outcomes,” he says.
When home prices rise faster than incomes, families that can receive financial support enter the housing market earlier and benefit from future appreciation. Those without such support are more likely to remain renters or move to distant locations.
“Without stronger affordable housing measures, India risks a similar inheritance-driven pattern, deepening intergenerational inequality in urban centres,” Sharma warns.
The pressure to enter the housing market is also affecting long-term financial planning.
According to Kumar, many families are exhausting their liquid savings to arrange large down payments and manage rising EMIs.
“Many buyers end up depleting their liquid cash reserves by halting mutual fund contributions and diverting long-term retirement savings to afford high down payments and escalating EMIs,” he says.
He warns that replacing liquid financial assets with an illiquid asset can weaken a family’s financial safety net and delay long-term wealth creation.
The answer is more complicated than simply saying developers are charging higher prices.
The cost of building a home has increased significantly over the past few years.
According to Binitha Dalal, Founder and Managing Partner at Mt. K Kapital, housing affordability cannot be looked at only through the lens of property prices.
“Developers have faced a steady rise in land acquisition costs, construction material prices, labour expenses, financing costs and regulatory charges, all of which have had a direct impact on housing prices across markets,” she says.
At the same time, homebuyers are demanding better-designed communities, improved amenities and higher-quality living environments, which has also affected project economics.
Mohit Goel, Managing Director of Omaxe Ltd, says rising land prices, construction costs, labour expenses, financing costs and compliance requirements have all contributed to increasing housing prices.
He also points out that the industry’s move towards premium housing reflects both buyer preference and business viability.
“Homebuyers today are seeking larger homes, better amenities and integrated communities, while developers need projects that can absorb rising input costs without compromising quality and timely delivery,” he says.
One of the biggest changes in India’s housing market has been the shift away from affordable and mid-income homes.
PropEquity data shows this trend clearly.
Between 2021 and 2025, the share of affordable and mid-income housing sales in Gurugram fell dramatically from 69% to just 3%.
In Bengaluru, the share declined from 82% to 35%.
Mumbai witnessed a fall from 78% to 42%, while Hyderabad saw it drop from 67% to 28%.
The shift does not mean demand from the middle class has disappeared.
The economics of building affordable homes has become more difficult.
“Affordable housing remains a critical pillar of India’s residential market and is essential for addressing the country’s long-term housing needs,” Dalal says.
She adds that the market cannot survive on premium demand alone.
“India’s housing market cannot sustain itself on premium demand alone. A balanced and inclusive growth trajectory will depend on creating an ecosystem where developers are encouraged to build affordable homes and aspiring homeowners have the financial support needed to enter the market.”
Goel says the middle-class buyer remains central to India’s real estate story, but many are now moving towards peripheral regions such as Greater Noida, Greater Noida West, Faridabad, Sohna and the Yamuna Expressway region, where they can find relatively better value.
Tier-II and Tier-III cities such as Lucknow, New Chandigarh, Indore, Prayagraj and Amritsar are also witnessing stronger demand because of improving infrastructure and economic growth.
The impact goes beyond individual homebuyers.
According to Sharma, a large section of society being priced out of homeownership creates wider economic risks.
High housing costs reduce discretionary spending, weaken demand for consumer goods and services and limit investments in education, healthcare and entrepreneurship.
Excessive borrowing also increases vulnerabilities in the financial system during economic slowdowns or periods of higher interest rates.
Sharma notes that countries across the United States, Europe and East Asia have already experienced similar affordability challenges, leading to longer commutes, delayed family formation and greater socio-economic segregation.
He argues that housing affordability should be treated as a structural urban development challenge rather than merely a temporary real estate cycle.
For generations, homeownership has been considered the preferred route to financial security in India. But in some expensive urban markets, the economics of renting versus buying are changing.
Kumar says many homebuyers make the mistake of confusing the maximum loan amount approved by a bank with what they can genuinely afford.
“The biggest mistake is equating maximum bank loan eligibility with personal affordability while completely ignoring ongoing ownership costs like property maintenance, taxes and lifestyle inflation,” he says.
He adds that buyers often fail to stress test their finances against future interest rate hikes on floating-rate home loans, which can significantly increase EMIs and create financial pressure.
In metros where property prices have surged sharply but rental yields remain low at around 2% to 3%, renting may be a more financially sensible option for many households.
“By opting to rent, individuals avoid heavy upfront capital locks like stamp duty and down payments, allowing them to redirect those liquid funds into higher-yielding financial instruments like equities while maintaining career mobility,” Kumar says.
Experts believe there is no single solution.
Dalal says affordable housing requires stronger policy support through measures such as GST rationalisation, income tax incentives for homebuyers, lower development premiums, reduced stamp duty and faster approvals.
Goel believes lower financing costs, quicker approvals and continued infrastructure investment are necessary to make affordable housing viable again.
Sharma adds that demand-side incentives alone, such as tax breaks or interest subsidies, may push prices higher unless they are accompanied by a significant increase in supply.
According to him, reforms in land-use planning, density regulations, transit-oriented development and stronger affordable housing policies are essential to bridge the widening gap between incomes and property prices.
The Indian desire to own a home has not disappeared.
What has changed is the cost of fulfilling that aspiration.
For a growing number of families, the question is no longer whether they want to buy a home.
It is whether their salary can realistically buy one.