Household Income Growth to Outpace Property Price Appreciation, Stabilising Housing Affordability in India
A recent report by CBRE, a global real estate consultancy, forecasts a significant shift in India's housing market dynamics. For the first time since 2021, household income growth is projected to surpass property price appreciation in 2026, leading to a stabilisation of housing affordability across the country. This trend is expected to ease the financial burden on homebuyers, particularly in major urban centres.
Key Findings from the CBRE Housing Affordability Index
The CBRE Housing Affordability Index, which tracks affordability in cities including Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, and Pune, reveals that the EMI-to-income ratio is anticipated to plateau through 2028. This marks a pivotal change from the period between 2021 and 2024, when property prices rose faster than incomes, driven by interest rate hikes and rapid capital value growth.
Anshuman Magazine, Chairman & CEO, India, South-East Asia, MEA, of CBRE, commented on this development, stating, "India's housing market is at a structural inflection point. The convergence of monetary easing, moderating price appreciation, and rising household disposable incomes is expected to cushion homebuying conditions across cities and income segments." He emphasised that this shift could lead to a divergence in sales value-over-volume dynamics throughout 2026.
Analysis of Income Brackets and Market Trends
The report focused on three annual household income brackets, ranging from Rs 40 lakh to Rs 1 crore, highlighting that the current trajectory signals measurable stabilisation through the forecast period. This aligns with India's broader economic transition toward upper-middle-income status by 2030, indicating a maturing real estate sector.
Gaurav Kumar, Managing Director & Co-Head, Capital Markets and Residential Services, India, CBRE, added, "The market is anchored by a resilient growth baseline and disciplined supply-demand parity. The anticipated stabilization in affordability over the next three years will be a vital catalyst in sustaining this momentum and informing strategic capital objectives across the ecosystem."
Review of the 2025 Residential Market Performance
In a review of the 2025 residential market, CBRE found that new launches and sales each exceeded 270,000 units. Notably, the high-end segment captured 27 per cent of total sales, surpassing the mid-end bracket for the first time, with premium and luxury sales growing by over 30 per cent year-on-year. While total sales volume moderated by approximately 8 per cent, the overall sales value grew by roughly 15 per cent, reflecting a structural shift toward higher-ticket inventory.
Challenges and Opportunities in the Affordable Housing Segment
Despite the growth in luxury segments, the affordable housing category, priced below Rs 45 lakh, remains constrained by high input costs and the withdrawal of previous fiscal incentives. The report suggests that government-led recalibration of price and area ceilings could restore this segment's market share to its pre-pandemic levels of 25-30 per cent. Such policy interventions could potentially add approximately 60,000 new units to the annual supply pipeline, addressing housing needs for lower-income groups.
Implications for Homebuyers and the Real Estate Sector
The stabilisation of housing affordability is expected to have several positive impacts:
- Reduced Financial Strain: Homebuyers may experience lower EMI burdens, making homeownership more accessible.
- Sustained Market Momentum: The trend could support continued growth in the real estate sector, particularly in premium segments.
- Policy Recommendations: Enhanced government support for affordable housing could boost supply and inclusivity in the market.
Overall, the CBRE report highlights a turning point in India's housing landscape, where income growth is set to outpace property prices, fostering a more balanced and sustainable market environment for years to come.
