Are rising home prices pushing India's housing market away from its traditional middle-class buyers?
India's housing market showed a strong recovery in early 2026, but the gains were concentrated in higher-priced homes. Housing prices across seven major cities rose 8-20% year-on-year in Q1 2026, while residential sales increased 8% to 70,631 units after falling the previous year. However, properties above Rs 1 crore recorded 30% growth, with the Rs 1.5-3 crore segment rising 67%, while sales of homes below Rs 1 crore fell 24%. The RBI's House Price Index rose 3.58% year-on-year in Q3 2025-26. Industry figures also indicate that prices are increasing faster than incomes, while rents remain elevated, potentially keeping more households in rental housing for longer.
The housing market has recovered in aggregate.
Affordability remains a concern for buyers.
The recovery is concentrated in more expensive properties.
Whether developers will increase supply of lower-priced homes enough to reverse the contraction in that segment.
Whether the decline in sub-Rs 1 crore sales reflects a lasting shift in buyer demand or temporary changes in inventory, financing, or supply.
How many middle-class households can currently afford homes at prevailing prices relative to their incomes and borrowing capacity.