Household income growth expected to outpace property price appreciation as housing affordability stabilises: Report

New Delhi [India], March 26 (ANI): Indian housing affordability is set to stabilise this year as household income growth is projected to outpace property price appreciation for the first time since 2021. According to the CBRE Housing Affordability Index, the EMI-to-income ratio is expected to plateau through 2028, easing the financial burden on homebuyers across major urban centres. This shift marks a significant pivot from the previous three years, where interest rate hikes and rapid capital value growth consistently pushed the EMI burden upward.

"India's housing market is at a structural inflection point," said Anshuman Magazine, Chairman & CEO, India, South-East Asia, MEA, of CBRE. He noted that the convergence of monetary easing, moderating price appreciation, and rising household disposable incomes is expected to cushion homebuying conditions across cities and income segments. The report suggests the sector could witness a divergence in sales value-over-volume dynamics throughout 2026.

The index tracked affordability across Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, and Pune, focusing on three annual household income brackets ranging from Rs 40 lakh to Rs 1 crore. While property prices rose faster than incomes between 2021 and 2024, the current trajectory signals a measurable stabilisation through the forecast period. This trend aligns with India's broader transition toward upper-middle-income status by 2030.

Gaurav Kumar, Managing Director & Co-Head, Capital Markets and Residential Services, India, CBRE, said, "The market is anchored by a resilient growth baseline and disciplined supply-demand parity. The anticipated stabilization in affordability over the next three years will be a vital catalyst in sustaining this momentum and informing strategic capital objectives across the ecosystem."

In a review of the 2025 residential market, the consultancy found that new launches and sales each exceeded 270,000 units. The high-end segment captured 27 per cent of total sales, surpassing the mid-end bracket for the first time as premium and luxury sales grew by over 30 per cent year-on-year. While total sales volume moderated by approximately 8 per cent, the overall sales value grew by roughly 15 per cent, reflecting a structural shift toward higher-ticket inventory.

Despite the growth in luxury segments, the sub-Rs 45 lakh affordable housing category remains constrained by high input costs and the withdrawal of previous fiscal incentives. The report suggests that a government-led recalibration of price and area ceilings could restore this segment's market share to its pre-pandemic levels of 25-30 per cent. Such policy interventions could potentially add approximately 60,000 new units to the annual supply pipeline. (ANI)

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