Home prices in India are forecast to surge, driven by demand from affluent buyers, while a shrinking supply of affordable housing is likely to keep many stuck in expensive rentals. According to a Reuters poll of property experts, average home prices are projected to rise 6.3% in 2025 and 7% in 2026, after climbing about 4% in 2024.
The concentration of well-paying jobs in a handful of cities and stagnating wages has pushed home ownership out of reach for millions moving to urban areas for work, forcing most would-be buyers to rent. India’s economy grew 7.8% last quarter, but experts warn the gains are increasingly captured by a small segment of the population, leaving job seekers on the sidelines.
India faces a deficit of about 10 million affordable homes, a gap that could triple by 2030. “The current problem is strong macro numbers have not benefited the population at the lower side of the pyramid and they are at a disadvantage,” said Ajay Sharma, Managing Director of Valuation Services at Colliers. “Their disposable incomes have stagnated.” As affordability declines, more people are renting, driving up rental costs. Median forecasts predict average urban rents to rise 5-8% over the coming year, outpacing consumer inflation.
This trend has long-term consequences, with experts warning that the qualifying age to purchase a property is rising from 30-40 years to 45 years old. Despite the Reserve Bank of India’s 100-basis-point rate cut this year, monetary easing hasn’t improved affordability significantly, Pankaj Kapoor of Liases Foras noted, “Post-financialisation in real estate, we have not improved affordability. We have worsened it to the point where the qualifying age to purchase a property has risen from around 30 to 40 years to 45 years old.” He added, “Crony capitalism starts with land ownership. So how can cities, where the rich control the land, create affordable housing? That’s why housing doesn’t give you choices โ it gives you frustrated options.”
