Trump tariffs leave affordable housing bleeding, experts hopeful of comeback

In what is being called the rippling effect of US President Donald Trump’s imposition of 25 per cent tariffs, the Indian housing market is stuck with sharp downturn of around 20 per cent in sales. The market has witnessed a massive price hike in the second quarter of 2025 and struggling with mounting price pressures and deepening buyer hesitancy.

The worst impacted by the ripple effect is the affordable housing market that is centered in Delhi NCR, especially Gurugram and Faridabad. According to a recent report by Anarock Affordable housing, homes priced up to Rs 45 lakh accounted for just 18 per cent of sales in India’s top seven cities in the first half of 2025, down sharply from 38 per cent in 2019. According to the report, 34,565 affordable homes were sold out of a total 1.90 lakh units during this period. Project launches have dropped steeply from 40 per cent of total launches in 2019 to just 12 per cent this year. The sale in Gurugram and Faridabad has reportedly dropped by 15 per cent and many builders have delayed launches to escape the ripple impact.

Though the situation seems grim, experts believe this too shall pass. “India’s housing sector has proven its resilience time and again, and the structural demand drivers remain very strong. While global developments like US tariffs may have ripple effects, India’s real estate, especially affordable and mid-housing, is firmly anchored by rising incomes, rapid urbanisation and government-led infrastructure push. In fact, these factors will continue to strengthen homeownership aspirations and ensure steady growth for the sector in the long run,” says Pradeep Aggarwal, Founder and Chairman, Signature Global (India) Ltd.

“Currently, homebuyers are driven by long-term confidence rather than short-term rate fluctuations. Developers may look to keep the momentum going with offers and flexible payment plans, which could improve affordability for genuine buyers,” adds Anuj Puri, Chairman, Anarock Group.

The sector’s woes is attributed to the impact of tariffs on India’s micro, small and medium enterprises (MSMEs) and small and medium enterprises (SMEs). According to the Union Ministry of Industry and Commerce estimates, MSMEs alone contribute nearly 30 per cent to the country’s GDP and over 45 per cent of exports, besides employing over 260 million people. Gurugram roughly accounts for 40 per cent of MSMEs in Delhi NCR. The workforce of these MSMEs has been significant in making the city a hub of affordable housing projects. It is closely followed by Faridabad. The twin cities of Haryana account for over 55 per cent of total MSME sector of Delhi NCR.