Over 450,000 affordable and mid-range homes across 1,500 stalled projects require urgent funding support as capital flows remain concentrated in premium real estate segments
Over 450,000 affordable and mid-range homes across 1,500 stalled projects require urgent funding support as capital flows remain concentrated in premium real estate segments
India currently faces a shortage of 10 million affordable housing units and is estimated to require an additional 25 million units by 2030
Prachi Pisal
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Affordable housing remains severely underfunded in India, with over 450,000 affordable and mid-range homes across more than 1,500 stuck projects requiring around ₹55,000 crore in funding support, according to a report by Anarock Capital.
The segment remains outside the focus of formal capital and institutional lending even as India’s real estate sector is projected to require nearly ₹50 trillion of capital over the next 10 years to support its growth into a $1 trillion market by 2030, the report said.
India’s real estate market, currently valued at $550 billion, is expected to grow to $5-7 trillion by 2047.
India currently faces a shortage of 10 million affordable housing units and is estimated to require an additional 25 million units by 2030.
Despite strong demand, affordable housing supply has sharply declined. Homes priced below ₹40 lakh accounted for just 10 per cent of new launches in the first quarter (Q1) of 2026, down from 26 per cent in 2021. In contrast, homes priced above ₹1.5 crore made up 53 per cent of launches during the quarter.
According to the report, financing increasingly concentrates around higher-margin projects and top developers in metropolitan markets, leaving affordable housing chronically underfunded.
“India’s real estate sector no longer faces a shortage of capital. The real challenge is whether this capital can reach beyond the top developers and major metros to fund affordable housing, smaller developers, and emerging tier two and tier three cities,” said Shobhit Agarwal, chief executive officer, Anarock Capital.
“India’s affordable housing problem is no longer a demand issue, but a structural capital allocation and financing architecture challenge,” said Vishal Srivastava, head – corporate finance, managing director, Anarock Capital.
The government-backed SWAMIH (Special Window for Affordable and Mid-Income Housing) Fund, launched in 2019 and later expanded to ₹15,530 crore, has enabled completion of 58,596 homes so far, with over 100,000 units expected in total. Budget 2025-26 also announced the SWAMIH Fund 2.0 with another ₹15,000 crore blended-finance vehicle targeting completion of an additional 100,000 stalled units.
PMAY-Urban 2.0 aims to support 10 million additional urban homes, while affordable housing finance companies are projected to grow assets under management by 20-21 per cent in financial year 2026-27 (FY27), outpacing the broader mortgage sector, the report added.
According to the report, outstanding individual housing loans stood at ₹38 trillion as of February 2026, while commercial real estate lending by banks exceeded ₹5.2 trillion. Real estate accounts for the largest sectoral allocation within India’s Alternative Investment Fund (AIF) industry.
The six listed real estate investment trusts (Reits) have a combined market capitalisation exceeding ₹2 trillion. Currently, 198 million square feet (msf), or about 37 per cent of India’s 520 msf Reit-worthy office stock, is listed.
India’s Reit penetration remains low compared to mature markets. Reit market capitalisation equals 0.4 per cent of stock market capitalisation and represents only 20 per cent of listed real estate market value.
The report identified data centres, logistics, industrial real estate, and global capability centre (GCC)-led office developments as the next major recipients of long-term capital.
“These sectors are attracting a different kind of capital - longterm, yield-focused, and globally benchmarked. This is creating a deeper and more resilient financing ecosystem,” the report added.
The report said India’s strong domestic demand, infrastructure investments, and regulatory reforms continue to provide a robust foundation for real estate growth despite geopolitical tensions and global market volatility.
It added that the Reserve Bank of India’s evolving project finance framework, deepening capital markets, and the growing role of private credit are strengthening the lending ecosystem. Developers with strong balance sheets, low leverage, and completed inventory are better placed to weather volatility and access capital on favourable terms.
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First Published: May 21 2026 | 2:53 PM IST