India’s Rising Incomes Make Home Buying More Affordable: Report

New Delhi: Rapid growth in household incomes has significantly improved home affordability in India over the past 15 years, with the country’s price-to-income ratio falling sharply from 88.5 in 2010 to 45.3 in 2025, according to a new report released by Colliers India.

While average incomes have grown more than fourfold — increasing around 10% annually — housing prices have risen at a slower pace of 5–7% per year. This growing gap has made it easier for families to purchase homes across major urban centres.

The report notes that this improvement has occurred despite several disruptions in the real estate sector over the decades, including PMAY, demonetisation, RERA, the NBFC crisis, GST rollout, and SWAMIH funding support.

Yet, residential sales have remained strong. In the post-pandemic period, major cities saw annual sales of 3–4 lakh homes, fuelled by improved infrastructure, favourable monetary policy, rising incomes, and stronger affordability.

Experts attribute the strong demand primarily to income growth outpacing housing price increases.
Badal Yagnik, CEO and MD of Colliers India, said that while higher raw material costs have pushed up property prices recently, rising incomes have helped buyers keep pace. He added that demand remains robust due to supportive interest rates and improved purchasing power.

However, affordability varies across cities due to factors such as local demand–supply dynamics, pricing strategies, and buyer profiles. Developers continue to offer diverse housing options to suit India’s highly price-sensitive market.

Affordability levels have improved significantly across all eight major Tier I cities since 2010, with Ahmedabad and Hyderabad emerging as among the most affordable markets.

The report also suggests that GST rate rationalisation on key construction materials could further support the affordable and mid-income housing segments by boosting buyer sentiment.

With inputs from IANS