The dream of owning a home in the city is becoming increasingly elusive as both buying and renting consume a larger share of household incomes. The United Nations World Cities Report 2026 paints a stark picture: homes today are less affordable than they were two decades ago, with the burden falling disproportionately on young people, female-headed households, migrants, visible minorities, and other vulnerable groups.
Rising Prices and Stagnant Incomes
While soaring property values have boosted homeowner wealth, tenants are struggling to save as a significant portion of their earnings goes toward rent. The report notes that the global price-to-income ratio rose from 9.5 in 2010 to 11.7 in 2023. In Southern Asia, the ratio climbed sharply from 9.7 to 16.8, highlighting growing affordability challenges. Europe and Northern America have largely avoided a similar crisis, but other regions are not as fortunate.
Why Housing Is Becoming Unaffordable
Experts attribute the worsening situation to rapid urbanization, population growth, new household formation, and restrictive regulations that constrain housing supply. Cities are expanding faster than the construction of new homes, leading to fierce competition for land and housing. The global housing shortfall grew from 251 million units in 2010 to 288 million in 2023. Limited serviced land, high construction costs, and regulatory delays are slowing delivery.
Renters Bear the Heaviest Burden
Nearly half of all rental households worldwide—about 44%—spend more than 30% of their income on housing. The strain is most acute in Sub-Saharan Africa, where low and irregular incomes, limited formal rental supply, and rapid urban growth converge. For millions, rent is no longer a manageable expense but a monthly crisis.
Inequality Deepens the Crisis
High income inequality exacerbates housing affordability issues. The report finds that higher inequality is directly linked to steeper rents, more overcrowding, and reduced access to adequate housing for low-income groups. The gap between homeowners and renters continues to widen.
Subsidized Housing Reaches Few
Most households are left to navigate an increasingly unaffordable market with little public support. Without broader intervention, the gap between supply and need will only grow.
India's Housing Reality
The affordability crunch is especially severe in India's largest cities. In Mumbai, the price-to-income ratio stands at 14.3, while in Delhi it is 10.1, putting formal homeownership out of reach for many median-income households. Limited access to formal mortgage financing compounds the challenge, forcing many families to rely on personal savings, informal loans, or support from extended family to buy a home.
Call for Policy Action
The UN report suggests that governments must align housing with transport, employment, and social protection strategies to make a real impact. Supply reform is urgent: planning bottlenecks, soaring construction costs, and weak land management have allowed demand to outstrip supply in cities worldwide. Finance must be directed at low-income families, young adults, migrants, and informal workers. The report also warns against putting the cart before the horse: more homes must be built before providing rental subsidies and buyer support. Meanwhile, unchecked corporate investment is quietly pricing out ordinary households, and regulators are struggling to keep up.
This article is based on the UN World Cities Report 2026 and analysis by the TOI Real Estate Desk.
