I'm a teacher in Lucknow and I've been saving for a home near good schools for years. When I started looking in 2022, the Rs 40-50L segment felt reachable. By 2026 it's a completely different market — and the data backs up what I'm feeling on the ground.
In the top 7 cities, new homes priced below Rs 50 lakh have shrunk from 52% of all launches in 2018 to just 17% in 2025. Developers have shifted upmarket because margins are better there. Meanwhile, the "affordable housing" category still uses the 2017 definition — Rs 45L in metros — while actual prices in those cities have risen 60-100% since then.
The EMI burden is brutal. EMI-to-income ratio for average buyers has climbed from 43% in 2020 to around 60% today. For a Rs 60L flat at 8.5% interest on an 80% loan, EMI comes to roughly Rs 46,000/month. Most teachers and government employees earn Rs 35,000-55,000. The math just doesn't work.
What's pushing developers away from budget housing: 1. No meaningful fiscal incentives — thin margins make it unviable 2. Construction costs have jumped sharply post-COVID 3. Land prices in locations with good schools/connectivity make sub-Rs 50L impossible 4. PMAY eligibility hasn't been updated since 2017 despite 60-100% price increases
India reportedly faces a shortage of 61.5 million housing units, with EWS and LIG accounting for 95% of that gap. Yet new supply keeps moving upmarket.
For first-time buyers who missed the 2018-2021 window — what realistic options exist now? Tier-2/3 cities? Resale market? Waiting it out?