In India’s cities, affordable housing is still available. There is considerable demand, particularly among first-time purchasers. However, compared to a few years ago, there are now notably fewer specialised affordable housing launches in many locations.
Part of the slowdown comes from rising construction costs. Cement, steel, transportation and finishing materials have all become more expensive, and affordable projects do not leave much room for cost overruns to begin with. Developers cannot keep increasing apartment prices indefinitely in this category either. Buyer budgets tend to be tighter here compared to mid-segment or premium housing.
Land prices are creating a separate problem. In several metro markets, especially around infrastructure corridors and expanding urban zones, acquisition costs have risen sharply over time. Standalone affordable projects become difficult to structure in such locations because the numbers stop working comfortably after a point. Some developers have quietly moved away from this format altogether.
That does not mean affordable inventory is vanishing. The supply route is changing.
“Standalone affordable projects have declined significantly, with most supply now coming through inclusionary zoning policies or mandated allocations such as economically weaker sections and low-income group units within larger residential developments,” said Sharad Sharma, Sales Director at Square Yards.
The shift is already visible across a number of urban markets. Affordable units are increasingly being folded into larger residential developments instead of coming through independent townships focused only on budget housing. In some projects, these allocations are linked to planning requirements or inclusionary housing policies. In others, developers are simply spreading land and infrastructure costs across multiple segments within the same development.
Launch numbers have slowed as well. According to Anarock data, affordable housing launches in Tier-1 cities decreased from over 72,400 units in 2022 to nearly 60,150 units in 2025. The first quarter of 2026 had approximately 12,850 launches.
Developers have also become more careful about where these projects are being planned. Much of the newer affordable supply is now moving towards peripheral locations and satellite corridors where land costs are still comparatively manageable. In several central urban markets, maintaining sub-₹45 lakh pricing is becoming harder year after year.
The ₹45 lakh affordable housing cap, unchanged since 2017, has also come under discussion again within the sector. Residential prices across many cities have shifted considerably since then. Demand for budget housing, though, continues to hold up. What seems to be changing more noticeably is the way affordable housing supply is entering the market.
Published Date : 30 April 2026
