India's Real Estate Affordability Crisis: Why Homeownership Takes Decades Even for High Earners

According to a recent discussion on Zee Business based on insights from the Knight Frank Wealth Report 2026, experts highlighted that the cost of home ownership in India’s top cities has surged to levels that are increasingly disconnected from income growth. Ankita Sood, National Director—Research, Knight Frank India, Binitha Dalal, Founder & Managing Partner, Mt K Kapital, and Ravi Sinha, CEO, Track2Realty, discussed the widening gap between property prices and income levels.

The residential property market in India faces a growing affordability challenge as fresh data and expert insights show that homeownership in major cities has become a multi-decade dream for most buyers, including the country's high-income earners. The Knight Frank Wealth Report 2026 underscores this trend, noting that homeownership expenses in India's major cities have reached levels that now exceed the pace of income growth.

The report also highlighted broader structural shifts, noting that India has become the 6th largest ultra-high-net-worth population globally, indicating a sharp rise in wealth creation alongside deepening inequality. India remains one of the most unequal major economies, with the top 1 per cent of the population controlling nearly 40 per cent of total wealth, placing it second globally in wealth inequality after Brazil.

Ravi Sinha pointed to striking affordability calculations shared during the discussion, noting that even among India’s top 5 per cent of earners, purchasing a 1,100 sq ft home without leverage would take an extraordinary amount of time based on current income levels. In Mumbai, it could take around 109 years, while in Gurgaon it could take about 62 years, underscoring the widening gap between incomes and real estate prices.

Experts highlighted that property prices in major metropolitan cities continue to rise steadily. Ankita Sood of Knight Frank India reported that annual price growth for Mumbai reached 8.7 per cent, Delhi achieved 6.9 per cent, and Bengaluru experienced 9.4 per cent growth, especially in its prime residential area. She explained that premium housing demand from end users drives this growth because there is only minimal speculative activity in the prime segment. She said that post-pandemic changes made it difficult for people to afford products and services.

Demand has moved toward the Rs 2.5 crore to Rs 5 crore housing segment over the last five years, she added, noting that the definition of affordability itself has evolved in India’s urban markets. The discussion also emphasised that India’s real estate boom is closely tied to income disparity and supply-side constraints. Binitha Dalal, Founder and Managing Partner at Mt K Kapital, attributed strong demand for property to both cultural and financial factors. She noted that real estate remains deeply embedded in Indian household behaviour.

“Real estate is not just emotional but an integral part of Indian culture. It is considered a safety net and a long-term wealth-building asset,” she said, adding that tax structures and traditional savings habits further encourage investment in property. However, she also highlighted a critical challenge: high land costs in metropolitan areas make affordable housing increasingly unviable, pushing developers toward higher-priced segments. She further noted that homes under the Rs 1 crore segment in major metro cities are witnessing weak demand and slower sales, as buyers either upgrade to better homes or shift expectations entirely.

The real estate experts further noted a structural shift in housing demand post-COVID-19. Sood explained that current housing trends show buyers now choose larger homes which offer improved facilities and better living conditions than the previous compact housing trend. The supply of products has changed to match the new demand patterns, resulting in higher price ranges. She explained that current affordability standards have shifted away from traditional methods of evaluation and now use actual market conditions which base home prices between Rs 2.5 crore and Rs 5 crore in major cities.

Ravi Sinha raised concerns about broader economic implications, arguing that rising billionaire wealth and asset concentration may not necessarily translate into healthy housing market fundamentals. He noted that India’s wealth distribution remains highly unequal, with the top 1 per cent controlling nearly 40 per cent of wealth, reinforcing concerns around structural imbalance. According to him, this places India among the most unequal major economies globally. “Billionaire growth is more of a narrative than an economic comfort indicator,” he said, warning that the perception of wealth expansion may mask deeper structural issues.

He further stressed that India’s growth model is increasingly capital-intensive rather than labour-intensive, meaning wealth is concentrating faster than employment-linked income growth. He also added more sharply that this trend may not only be weak for the economy, but also for the housing sector and broader tax base in the long term, as it deepens structural distortions. Despite concerns in metros, experts also highlighted growth in Tier-2 and Tier-3 cities. Sood pointed to rising luxury consumption and real estate interest in cities such as Surat, Kochi, Indore, and Guwahati.

She noted that nearly 50 per cent of online luxury retail demand is now coming from Tier-2 cities, suggesting that wealth distribution is gradually expanding beyond major metropolitan centres. This entire discussion has brought out one critical aspect, which is the increasing divergence between house prices and the income level within India's metropolitan cities. It can be argued that while demand for luxurious or prime houses continues to soar, the ability to acquire homes by most people appears challenging. Furthermore, according to the experts in this discussion, even during the post-pandemic period, homes in lower price segments have not been purchased because of an inconsistency in supply and the ability of the buyer to purchase the house. People need to take longer time periods to achieve home ownership in major urban centres because home prices are increasing at faster rates than income levels, and higher affordability limits have become the new standard.