Affordable Housing Faces Dual Challenges in India
India's residential real estate market is undergoing a significant shift, with affordable housing squeezed from both sides. On one hand, rising land, approval, and construction costs have increased the financial burden on developers. On the other hand, they are opting for more profitable segments with stable demand, as stated by Niranjan Hiranandani, Chairman of the National Real Estate Development Council (NAREDCO).
According to Hiranandani, India's residential real estate market is not declining, but rather transitioning. A key indicator of this shift is the divergence between volume and value. While housing sales in the top seven cities declined by 14% in 2025, the total value of sales increased by 6% to reach ₹6 lakh crore, signifying a more selective, formal, and value-led market.
Key Trends in India's Residential Real Estate Market
- Transitioning Market: India's residential real estate market is not declining, but rather undergoing a transformation.
- Divergence of Volume and Value: The market is becoming more selective, formal, and value-led, with a focus on higher-priced properties.
- Rising Costs: Land, approval, and construction costs continue to increase, impacting developers and affordability.
- Segment Shifting: Developers are moving towards more profitable segments with stable demand, leaving behind affordable housing.
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