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The CBRE Housing Affordability Index indicates that, for the first time since 2021, household income growth is expected to outpace property price appreciation.
The ongoing conflict in West Asia introduces near-term uncertainty.
Housing prices across top Indian cities have moderated over the past two years. According to a report, a favourable interest rate environment and rising household incomes are expected to stabilise housing affordability between 2026 and 2028.
The CBRE Housing Affordability Index indicates that, for the first time since 2021, household income growth is expected to outpace property price appreciation, easing the homebuying burden for a wide range of households.
There has been a consistent rise in the EMI-to-income ratio between 2021 and 2024 due to the interest rate-tightening cycle and property price growth outpacing income gains. However, the ratio is projected to plateau between 2026 and 2028, signalling measurable stabilisation in affordability.
The report tracked affordability across three annual household income brackets — Rs 40 lakh, Rs 75 lakh, and Rs 1 crore — across Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, and Pune, mapping EMI burdens against evolving homebuyer aspirations from 2021 to 2028.
While developers say improving affordability could support demand, they have flagged caution amid the ongoing West Asia conflict.
Lalit Parihar, managing director of Aaiji Group, said the improvement in affordability metrics is likely to support demand over the medium term, even as the market navigates external headwinds.
“The ongoing conflict in West Asia introduces near-term uncertainty, with potential upside risks to inflation and interest rates, which could make developers and investors cautious in the short term,” he added.
The impact of the conflict is already visible, with housing sales in the top seven cities rising 9% year-on-year but declining 7% quarter-on-quarter to 1,01,675 units in Q1 2026, according to Anarock.
Bengaluru, however, continued to outperform. Housing sales rose 10% year-on-year to 16,440 units in Q1 2026, although they saw a marginal 5% quarter-on-quarter decline.
Umesh Gowda H A, chairman and founder of Sanjeevini Group, said Bengaluru continues to stand out due to one of the highest per capita incomes among Indian cities, supported by a strong presence of domestic and global companies, including GCCs.
“These factors provide developers the flexibility to explore new micro-markets and innovate in project planning without significant price escalation. We remain optimistic that improving affordability will sustain demand, with emerging corridors, particularly in East Bengaluru, expected to witness strong traction,” Gowda added.
Bengaluru’s real estate market has been driven by sustained job creation and rising household incomes. As a result, despite double-digit property price increases over the past two years, stable interest rates and income growth have supported end-user demand.
Ramji Subramaniam, managing director of Sowparnika Projects, said the outlook for housing affordability remains encouraging, particularly in cities like Bengaluru, where end-user demand is strong.
“With household incomes expected to grow faster than property prices, we anticipate improved buyer confidence in the mid-segment housing category. This is likely to sustain sales momentum and encourage first-time homebuyers to enter the market,” he added.
While stabilisation in affordability is a positive signal, it also reflects a maturing demand cycle, with buyers becoming more value-conscious and long-term focused. For developers, this presents an opportunity to focus on well-planned, execution-driven projects that balance affordability with future value.
Navin Dhanuka, director of ArisUnitern, said, “As incomes begin to outpace price growth, we expect stronger traction in plotted developments and land-led investments, where entry points remain relatively accessible and appreciation is closely linked to infrastructure development.”
The ongoing conflict has introduced uncertainty, with early signs of impact on sales, launches, and project execution timelines. Rising oil prices, higher construction costs, and subdued investor sentiment in both India and the Middle East will be key factors to watch, as they could disrupt a housing market that has already been moderating since 2024 after a two-year record run.
Housing Sales Fall Below 1 Lakh Unit Mark After 18 Quarters
The housing sales in India’s top-9 cities continued to decline in Q1 (January-March) 2026, falling below the 1 lakh unit mark after 18 quarters, owing to fewer supply across most major cities. According to NSE-listed real estate data analytics company PropEquity, housing sales fell by 13% YoY and 6% QoQ to 98,761 units while launches fell by 19% YoY and 8% QoQ to 92,411 units in January-March 2026.
Bengaluru, with sales of 17,991 units, emerged as the highest-selling market. The city recorded 16% QoQ and 3% YoY growth.
Delhi-NCR with 12,141 units recorded 13% YoY growth. However, on QoQ basis, sales fell by 1%. All other cities saw a decline in sales.
March 30, 2026, 2:18 PM IST
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