Housing affordability to stabilise as income growth outpaces property prices: CBRE

India’s housing affordability is expected to stabilise over the next three years as rising household incomes begin to outpace property price growth, according to the latest Housing Affordability Index released by CBRE South Asia Private Limited.

In its India Residential Market Outlook 2026, the consultancy noted that the EMI-to-income ratio—a key metric used to assess affordability—is projected to plateau between 2026 and 2028 across major urban markets. This marks a significant shift from the 2021–2024 period, when affordability worsened due to rising property prices and higher interest rates driven by tightening measures from the Reserve Bank of India.

The report assessed affordability across six major cities—Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, and Pune—across three income brackets of Rs40 lakh, Rs75 lakh, and Rs1 crore annually.

According to Anshuman Magazine, Chairman and CEO (India, South-East Asia, Middle East & Africa) at CBRE, the housing market is entering a “structural inflection point,” supported by easing monetary conditions, moderating price appreciation, and stronger disposable incomes. He indicated that while affordability is improving, the market may see divergence between sales volumes and overall transaction values in 2026.

CBRE’s analysis shows that after a sustained rise in the EMI-to-income ratio until 2024, affordability conditions are expected to stabilise from 2026 onwards across all income categories. This trend is expected to support sustained demand, even as broader economic and geopolitical uncertainties persist. Gaurav Kumar, Managing Director and Co-Head of Capital Markets and Residential Services at CBRE India, noted that the sector continues to be underpinned by balanced supply-demand dynamics. He added that improved affordability would play a critical role in sustaining market momentum and shaping investment

strategies.

Residential Market Trends

The report also highlighted key developments in 2025, when India’s residential real estate sector recorded over 270,000 housing unit launches and a similar number of sales. Notably, the high-end segment accounted for about 27 per cent of total sales, surpassing the mid-end category for the first time.

Premium and luxury housing segments witnessed over 30 per cent year-on-year growth, while supply expanded by 38 per cent, including around 52,000 new luxury units. Despite an 8 per cent dip in overall sales volumes, the total sales value rose by approximately 15 per cent, reflecting a clear shift toward higher-value

housing.

Affordable Housing Concerns

However, the affordable housing segment—particularly homes priced below Rs45 lakh—continues to face challenges due to rising input costs and the withdrawal of targeted government incentives.

CBRE suggested that policy recalibration, including revising price thresholds and reintroducing incentives for developers and buyers, could revive demand in this segment. Such measures could help restore its market share to pre-pandemic levels of 25–30 per cent and potentially add around 60,000 housing units annually.

Overall, the report indicates that while India’s housing market may remain range-bound in terms of sales volumes, improved affordability and sustained demand for premium housing are likely to keep overall market values elevated in the coming years.