Affordable Housing Supply Dwindles in Major Indian Cities
A recent report by NAREDCO and Knight Frank reveals a significant decline in the supply of affordable homes in India's top 8 cities, raising concerns about the growing housing deficit.
Affordable HousingReal EstateUrban Housing DeficitNaredcoKnight FrankReal Estate NewsAug 29, 2025
The report highlights a significant drop in the ratio of new launches of affordable homes to sales of housing units costing up to Rs 50 lakh. In 2025 (until June), this ratio has fallen to 0.36, down from 1.05 in 2019 and 1.30 in 2020. This decline is a cause for concern, especially given the persistent demand for affordable housing in urban areas.
The study covers eight major cities in India: Bengaluru, Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Kolkata, Hyderabad, Chennai, and Ahmedabad. These cities collectively face a growing deficit in affordable housing, which is projected to worsen if current trends continue.
G Hari Babu, President of NAREDCO, emphasized the scale of the challenge, noting that India currently has a deficit of 9.4 million affordable housing units, a figure that could rise to 30 million by 2030. "The fact that new supply in this segment has dropped sharply while demand continues to grow is a matter of concern. Limited private investment further widens the gap," he stated.
To address this issue, Babu called for bold supply-side reforms, including the unlocking of public sector undertaking (PSU) land for housing, rationalizing floor space index (FSI) norms, and enabling subsidized construction finance. These measures are crucial for bridging the gap between supply and demand in the affordable housing sector.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, echoed the need for comprehensive reforms. "While policy support on the demand side has been commendable, there is a pressing need to address supply-side barriers. Encouraging private sector participation in the affordable housing segment is essential to meet the growing demand," he said.
The report underscores the importance of a multi-faceted approach to addressing the affordable housing crisis. It highlights the need for both government intervention and private sector involvement to ensure a sustainable solution. The recommendations include policy reforms, financial incentives, and innovative construction methods to increase the supply of affordable homes.
As urban populations continue to grow, the demand for affordable housing is likely to increase. Addressing this challenge requires a concerted effort from all stakeholders, including policymakers, developers, and financial institutions. The NAREDCO-Knight Frank report serves as a wake-up call, urging immediate action to prevent a worsening housing crisis in India's major cities.
Frequently Asked Questions
What is the current ratio of new affordable housing launches to sales in India's top 8 cities?
The ratio of new launches of affordable homes to sales of housing units costing up to Rs 50 lakh in India's top 8 cities has fallen to 0.36 in 2025 (until June), down from 1.05 in 2019 and 1.30 in 2020.
Which cities are included in the NAREDCO-Knight Frank report?
The report covers Bengaluru, Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Kolkata, Hyderabad, Chennai, and Ahmedabad.
What is the projected deficit in affordable housing units by 2030?
India is projected to have a deficit of 30 million affordable housing units by 2030, up from the current deficit of 9.4 million units.
What supply-side reforms are recommended in the report?
The report recommends unlocking PSU land for housing, rationalizing FSI norms, and enabling subsidized construction finance to increase the supply of affordable homes.
Why is private sector participation crucial in the affordable housing segment?
Private sector participation is essential to meet the growing demand for affordable housing, as it can bring in the necessary investment and innovation to increase the supply of affordable homes.
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