CNN Central News & Network–ITDC India Epress/ITDC News Bhopal: Warning that the country’s housing ladder is losing its crucial first rungs, Ashwinder R. Singh, Vice-Chairman & CEO of BCD Group and Chairman of the CII Real Estate Committee, has raised a red flag over India’s shrinking affordable housing supply. Affordable housing is not a second-tier pursuit, and the real estate sector must embrace affordability.
Despite India’s massive housing shortfall, developers are increasingly turning away from sub-Rs. 50-lakh homes. Singh points out that the trend is being driven not only by tighter margins and heavier regulatory burdens but also by the stigma that still surrounds budget housing in the eyes of the industry. “When a fellow developer recently asked me, ‘When will you move beyond budget projects?’ he thought he was encouraging me,” Singh remarked, highlighting the misplaced perception that affordability equates to underachievement.
The numbers paint a stark picture. Nearly half the homes sold in India’s top eight cities in the first half of 2025 were priced above Rs. 1 crore, according to Knight Frank India. Meanwhile, affordable housing launches in 15 Tier-2 cities plummeted 67% year-on-year in Q1 2025, based on PropEquity data. Even in seven major metros, sales of units priced below Rs. 50 lakh declined by 14% in 2024, despite record overall residential sales.
Singh identifies a “triple penalty” that discourages developers from building affordable homes. First, compressed margins and high input costs make budget projects commercially risky. Second, affordable offerings are seen as diluting brand value, which in turn affects pricing power. Third, capital continues to favour premium projects, with banks and funds applying stricter lending norms and lower exposure limits to budget housing. He further notes that compliance remains disproportionately burdensome, with budget projects facing the same regulatory hurdles as high-end developments. The lapse of the Credit-Linked Subsidy Scheme in 2022 and fragmented state incentives have further weakened the segment’s viability.
Yet, the market continues to signal strong demand for affordability. As per a blended estimate by CII–NAREDCO, 73% of incremental urban housing demand sits below the Rs. 50-lakh mark, predominantly driven by millennial families looking for shorter commutes. EY data also reveals that nearly a quarter of all mortgage disbursements in the past year were for affordable housing.
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