India's residential real estate market is currently experiencing a significant divergence. While overall sales remain strong, with 171,471 homes sold across eight major cities in the first half of 2026, the market is increasingly dominated by premium and luxury projects. Data from Knight Frank India highlights that homes priced above ₹1 crore now account for 54% of total residential sales, up from 49% a year ago. Conversely, the supply of affordable housing has shrunk dramatically, falling to just 6% of new launches compared to 52% in 2018.
This shift is creating a growing affordability gap for middle-class families. Although many potential buyers can manage monthly loan payments, they are finding it increasingly difficult to locate properties that fit within their budgets. Rising land costs, higher construction expenses, and a developer preference for high-margin premium projects have collectively pushed entry-level homeownership out of reach for many households.
Market experts note that the sector is entering a phase of consolidation. While demand remains supported by urbanization and infrastructure development, the market is becoming highly selective. Future price growth may rely more on developer incentives and flexible payment plans rather than broad-based demand, as inventory levels gradually rise in certain segments.
For the average middle-class buyer, the challenge is structural. With property prices in major metros rising faster than average income growth, the dream of homeownership is becoming a long-term financial burden. As the market continues to favor higher-ticket projects, the gap between aspiration and affordability remains a critical issue for the broader economy.