The supply-to-demand ratio for affordable housing across the top 8 cities has plummeted to 0.36 in 2025 (until June), down from 1.05 in 2019, as developers continue to focus on launching luxury projects, according to a joint report by National Real Estate Development Council ( NAREDCO) and property consultancy firm Knight Frank.
India’s existing affordable urban housing shortage is estimated at 9.4 million units and by 2030, cumulative affordable housing demand (including EWS, LIG, and MIG households) is projected to reach 30 million units.
Earlier, developers used to launched more affordable housing units than were sold, driven by schemes such as the Pradhan Mantri Awas Yojana ( PMAY). In contrast, 2025 data show launches have collapsed to barely a third of sales, highlighting imbalance that is likely to impact housing affordability and limit buyer choice.
“The fact that new supply in this segment has dropped sharply while demand continues to grow is a matter of concern. Limited private investment further widens the gap. Unlocking PSU land for housing, rationalising FSI norms, and enabling subsidised construction finance are some of the measures that can restore affordability, attract private participation, and ensure that affordable housing becomes the real engine of inclusive urban growth in India,” said G Hari Babu, President, Naredco.
Over the past decade, policy interventions such as PMAY, Affordable Rental Housing Complexes (ARHCs), and tax benefits have provided support to homebuyers. These measures improved affordability and expanded access to credit for economically weaker sections and low-income groups.
But for the last few years, supply continues to lag demand as developers face challenges including high land costs, limited access to construction finance, regulatory delays, and inadequate infrastructure in peripheral urban zones.
“Affordable housing is not only a social priority but also an economic necessity. As India urbanizes rapidly, the imbalance between supply and demand in this segment poses significant risks to inclusive growth,” said Shishir Baijal, chairman and managing director, Knight Frank India.
In 2025 (Until June), the share of affordable housing, value of housing units priced under Rs 50 lakh stood at 17%, a sharp decline from 52.4% in 2018.
Between 2011 and 2024, private equity inflows into affordable housing totalled USD 1.9 bn, accounting for just 7.8% of the residential sector. Foreign funds accounted for merely 10.2% of the capital inflow into affordable housing segment between 2019-24.
“Without targeted incentives and financing mechanisms, affordable housing will remain underserved. Addressing these gaps can unlock private investment and create a sustainable ecosystem for the segment,” said Gulam Zia, Senior Executive Director– Advisory, Valuation, and Research, Knight Frank India.
India’s existing affordable urban housing shortage is estimated at 9.4 million units and by 2030, cumulative affordable housing demand (including EWS, LIG, and MIG households) is projected to reach 30 million units.
Earlier, developers used to launched more affordable housing units than were sold, driven by schemes such as the Pradhan Mantri Awas Yojana ( PMAY). In contrast, 2025 data show launches have collapsed to barely a third of sales, highlighting imbalance that is likely to impact housing affordability and limit buyer choice.
“The fact that new supply in this segment has dropped sharply while demand continues to grow is a matter of concern. Limited private investment further widens the gap. Unlocking PSU land for housing, rationalising FSI norms, and enabling subsidised construction finance are some of the measures that can restore affordability, attract private participation, and ensure that affordable housing becomes the real engine of inclusive urban growth in India,” said G Hari Babu, President, Naredco.
Over the past decade, policy interventions such as PMAY, Affordable Rental Housing Complexes (ARHCs), and tax benefits have provided support to homebuyers. These measures improved affordability and expanded access to credit for economically weaker sections and low-income groups.
But for the last few years, supply continues to lag demand as developers face challenges including high land costs, limited access to construction finance, regulatory delays, and inadequate infrastructure in peripheral urban zones.
“Affordable housing is not only a social priority but also an economic necessity. As India urbanizes rapidly, the imbalance between supply and demand in this segment poses significant risks to inclusive growth,” said Shishir Baijal, chairman and managing director, Knight Frank India.
In 2025 (Until June), the share of affordable housing, value of housing units priced under Rs 50 lakh stood at 17%, a sharp decline from 52.4% in 2018.
Between 2011 and 2024, private equity inflows into affordable housing totalled USD 1.9 bn, accounting for just 7.8% of the residential sector. Foreign funds accounted for merely 10.2% of the capital inflow into affordable housing segment between 2019-24.
“Without targeted incentives and financing mechanisms, affordable housing will remain underserved. Addressing these gaps can unlock private investment and create a sustainable ecosystem for the segment,” said Gulam Zia, Senior Executive Director– Advisory, Valuation, and Research, Knight Frank India.
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