Mumbai Real Estate Crisis: Top 5% Need 109 Years to Afford a Home
A recent analysis reveals that even the wealthiest 5% of urban households in Maharashtra would need to save for 109 years to purchase an average-sized home in Mumbai, highlighting the severe housing affordability crisis.
Real EstateHousing AffordabilityMumbaiMaharashtraUrban HouseholdsReal Estate MaharashtraJun 29, 2025
The calculation compares household incomes with average housing prices in state capitals. Mumbai, the financial hub of India, stands out as the most unaffordable city. The study reveals that the top 5% of urban households in Maharashtra would need to save for more than a century—109 years—to buy a house in Mumbai.
The data hinges on comparing the monthly per capita consumption expenditure (MPCE) of the top 5% of urban households in each state, sourced from official statistics, with the average carpet area price of a 110 square metre (1,184 sq ft) home in the state capital, based on NHB’s market data. For instance, in Maharashtra:
- Top 5% MPCE: Rs 22,352 per person/month
- For a 4-member family: Rs 89,408/month or Rs 10.7 lakh/year
- Assumed savings rate (based on India's gross savings rate): 30.2% → Annual savings: Rs 3.2 lakh
- Average price of a 1,184 sq ft house in Mumbai: Rs 29,911 per sq ft → Total: Rs 3.54 crore
Thus, Rs 3.54 crore ÷ Rs 3.2 lakh = 110.6 years of saving, rounded to 109 years in the study.
Gurgaon (Haryana) and Bhubaneswar (Odisha) also face deep affordability issues. In Gurgaon, the richest 5% of urban households would need 63 years of saving to afford a home, while in Bhubaneswar, the figure is over 50 years. “This shows that even India’s urban elite—excluding the ultra-rich—are priced out of home ownership in the country’s most aspirational cities,” a senior housing economist told TOI, requesting anonymity.
However, a few cities still offer relatively affordable housing. Of the 21 state capitals for which NHB provides carpet area price data, 10 require more than 30 years of saving by top urban earners to afford a home. Chandigarh and Jaipur stand out as exceptions:
- Chandigarh: 15 years of savings required
- Jaipur: Just under 20 years
These cities remain outliers where property prices still align, albeit modestly, with income levels.
Multiple factors contribute to Mumbai’s severe affordability crisis. Land scarcity and outdated zoning laws, heavy stamp duties and taxes, inadequate supply of mid-income and affordable housing, and rising input costs and speculative property holding are some of the key issues. Additionally, real estate continues to be a preferred investment class, keeping prices elevated despite stagnant real income growth among middle- and upper-middle-class households.
The report highlights deep structural imbalances in India’s housing market. The 30.2% gross savings rate, while high on paper, doesn’t translate into home buying capacity when real estate is priced far above income metrics. Widening wealth inequality means that while some can afford multiple homes, the majority cannot dream of owning even one. Urban rental yields remain low, making it unviable for builders to focus on rental housing, despite the need.
India’s flagship urban housing programmes like Pradhan Mantri Awas Yojana (PMAY) have largely focused on lower-income households. However, the data suggests a growing ‘missing middle’ crisis—where salaried professionals and entrepreneurs also struggle to enter the housing market. Experts call for:
- Zoning and FSI reforms to improve land-use efficiency
- Incentives for developers to build mid-range housing
- Creation of urban rental housing frameworks
- Accurate affordability indexing in housing policy decisions
With affordability ratios this dire, the dream of owning a home in India’s megacities is slipping away for all but the ultra-wealthy. Young urban professionals, despite good education and steady jobs, face decades of financial strain without clear pathways to ownership. Unless policy interventions tackle the core issues of land pricing, speculative markets, and income stagnation, housing in cities like Mumbai may remain permanently exclusionary.
Frequently Asked Questions
What is the main finding of the study on housing affordability in Mumbai?
The study found that even the wealthiest 5% of urban households in Maharashtra would need to save for 109 years to afford an average-sized home in Mumbai.
Which cities are the most unaffordable for housing in India?
Mumbai, Gurgaon (Haryana), and Bhubaneswar (Odisha) are the most unaffordable cities, where even the richest urban dwellers would need more than 50 years of savings to purchase an average-sized home.
What factors contribute to Mumbai’s housing affordability crisis?
Multiple factors contribute, including land scarcity, outdated zoning laws, heavy stamp duties and taxes, inadequate supply of mid-income and affordable housing, rising input costs, and speculative property holding.
Are there any cities in India where housing is relatively affordable?
Yes, Chandigarh and Jaipur are relatively affordable, requiring 15 and just under 20 years of savings, respectively, for the top 5% of urban households to afford a home.
What policy changes are suggested to improve housing affordability in India?
Experts suggest zoning and FSI reforms, incentives for developers to build mid-range housing, creation of urban rental housing frameworks, and accurate affordability indexing in housing policy decisions.
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