India’s Housing Market – Why Buying a Home Feels Impossible for the Middle Class
Buying a home has always been considered one of the biggest milestones in an Indian family’s life. For decades, our parents and grandparents proudly spoke about building their houses brick by brick, often without loans. But today, for the new generation of salaried professionals, purchasing a flat in India’s metro cities feels like chasing a mirage.
The Story of Riya & Sameer – A Middle-Class Struggle
Let’s begin with the story of Riya and Sameer, a young couple working in Bangalore. Both of them earn well, with a combined annual income of around ₹30 lakhs. After paying rent for years, they decided to buy their first apartment. They set their budget at ₹90 lakhs, assuming this would be enough to secure a good 2BHK or 3BHK apartment.
But reality hit them hard.
Every project they liked was priced at ₹1.5 crore or more. Even basic apartments started at ₹1.2 crore, excluding registration fees, GST, and other charges. Their dream of owning a house in Bangalore felt shattered.
Disheartened by the high prices, they turned their attention to Bhubaneswar—their hometown in Odisha—hoping property there would be more affordable. Since Bhubaneswar is not as developed as Bangalore or Delhi, they assumed that land and property would be cheaper. But to their shock, most good apartments were also priced between ₹1 crore and ₹1.2 crore, again before taxes and additional charges.
This left them with the big question—with an income of ₹30 lakhs per year, why can’t we afford a flat without falling into a long-term loan trap?
And this is not just the story of Riya and Sameer—it’s the harsh reality of thousands of middle-class families in India
How Did We Reach This Silent Housing Crisis?
India’s housing market has quietly slipped into a dangerous imbalance where affordable housing is disappearing, while luxury housing is mushrooming everywhere. Whether it is Mumbai, Delhi-NCR (Gurgaon, Noida), Bangalore, Hyderabad, or even Tier-2 cities like Bhubaneswar, the story remains the same:
- Prices are skyrocketing: In 2024, the starting rate for apartments in most Tier-1 cities is around ₹1 crore, and in many cases, prices have already increased by 20–25% in just the last year.
- Developers are focusing on luxury: Instead of building affordable homes, most builders launch premium projects with high-end facilities, targeting NRIs and wealthy investors.
- Supply-demand mismatch: Affordable housing demand is far higher, but supply remains negligible.
- Speculative investments: Many investors buy flats not for living but for holding and selling later, which artificially inflates prices.
Price-to-Income Ratio – The Real Eye-Opener
The Price-to-Income Ratio (PIR) is a straightforward measure of housing affordability, showing how many years of average household income it would take to buy a home in a city.
- Globally, a PIR of 3–5 is considered healthy (i.e., a home costs 3 to 5 years of household income).
- In India, the PIR has crossed 10–12 in most big cities.
👉 Example: In Bangalore, with an average household income of ₹12–15 lakhs, decent flats cost ₹1.5–2 crores—meaning 12 to 15 years of income is required, not counting loan interest.
This shows why even high-earning families struggle to afford homes without heavy loans.
Rental Yields – Another Shocking Truth
Rental yield measures how much income (rent) a property generates compared to its price. Globally, yields of 4–6% are common. In India:
- Mumbai – 2.8%
- Delhi NCR – 2.5%
- Bangalore – 3.0%
- Hyderabad – 3.2%
- Bhubaneswar – 2.4%
This means that buying flats in India is a poor investment, as rental returns are very low compared to the purchase price. Ironically, while buyers struggle with EMI burdens, tenants still find rent cheaper than paying a home loan.
The Trap of Rising Apartment Prices
So why are people still buying apartments at inflated prices?
- Social expectations: In India, owning a home is often linked with respect, pride, and security, making it more than just a financial decision.Marketing strategies: Builders push “luxury lifestyle” projects with clubhouses, swimming pools, and smart homes.
- Fear of missing out (FOMO): Buyers think prices will only rise further, so they rush to book.
- Bank-driven lending: Easy loans create a false sense of affordability.
But the reality is that middle-class buyers are paying 20–30% more than the actual value of their flats.
And worse, the so-called “investment” in apartments often depreciates, because new projects with better facilities launch every year, making older flats less attractive.
Then What’s the Solution?
If apartments are overpriced and rental yields are poor, what should middle-class families do?
One practical alternative is constructing your own independent home on a plot of land. Unlike apartments, where half the cost goes into “super built-up area,” amenities, and builder’s profit margin, building your own home allows you to:
- Save 20–30% of costs.
- Customize the design as per your family’s needs.
- Retain long-term property value (land always appreciates).
- Avoid dependency on builders.
Final Thoughts – India’s Silent Housing Crisis
India’s housing market is currently tilted towards luxury, leaving the middle class trapped between high rents and impossible home loans. Families like Riya and Sameer are realizing that despite earning well, they cannot comfortably afford a decent apartment without 20–25 years of EMI pressure.
But awareness is the first step toward change. The truth is, apartments are not always the best investment—they are often overpriced, low-yield assets that depreciate faster than expected.
👉 That’s why many smart families are now shifting back to own-home construction on plots, where they get better value for money and full ownership.
📌 In our next blog, we will deep dive into the Bhubaneswar housing market—its price trends, rental yields, and whether it really offers affordability compared to metro cities
Meanwhile, if you are planning to build your own home, we can help with planning, design, elevation, estimation, and full construction support. Contact us today to turn your dream home into reality.
