by datta Nighut 
Explore India’s Housing Crisis, Where Over 300,000 Homes Lie Vacant In Mumbai While Affordable Housing Vanishes. Learn Why Developers Favor Luxury Projects, The Impact On The Middle Class, And Solutions To Bridge The Gap.
In today’s fast-paced world, having a place of your own still is viewed as a vital human need, right up there with food and clothing. Over time, however, the situation in India has become such that galloping inflation no longer allows for owning a home to be a realistic goal for masses of the population.
The majority of people can afford at least food and clothing with a side hustle, but to get a home spot—speaking particularly about the people in busy centers such as Mumbai, seems out of the question for them. The common worker, through the difficult days of paying the loan for the house, usually lives through the retrenchment of their life, where weekly payments are spread over several decades.
This does not affect the fact that it is still a minimum requirement for people to decide for themselves whether or not to take the risk of such a massive debt, if having a good home is of a reasonable standard. However, a stomach-churning issue comes to the mind, why are more than 300,000 flats in Mumbai, India’s financial hub, vacant when the demand for economical living is so pressing?
The Mumbai Paradox: A City of Dreams and Empty Homes
Mumbai, which is sometimes also called the “City of Dreams,” is the place where millions of people come to try their luck. And still, many people have to face such a difficult task as finding a place to live, even if they are well-off. Mumbai is the most expensive city when it comes to property prices in India. The rents are usually very high and thus, more than half of a jobholder’s salary can be spent on rent. Most of the people consider getting a home as a tougher option than finding a job.
The recent statistics data published by a non-broking real estate research firm Liases Foras shows that the number of vacant homes in the Mumbai Metropolitan Region was huge, 352,670 homes were empty in March 2025. At the same time, Pune also reported that there were 89,542 empty houses. Although Mumbai’s home sales saw a 24.8% increase (162,400 homes were sold in 2024 as against 129,793 of 2023-24) and a 8.9% rise was noticed in Pune (2024-25 has 85,000 homes sales against 78,000 the previous year), the number of empty houses has almost not changed over the past 19 months.
Then, what is the cause of this phenomenon? Is the average Indian unable to buy a home?
The Decline of Affordable Housing
The data paints a grim picture for India’s lower and middle-income groups. According to PropEquity, a real estate data analytics firm listed on the NSE, the supply of affordable homes—defined as those priced at ₹1 crore or less—has plummeted by 36% over the past two years. In 2022, 312,160 affordable housing units were available across nine major metropolitan cities (Bengaluru, Chennai, Hyderabad, Mumbai, Pune, Thane, Navi Mumbai, Kolkata, and Delhi-NCR). By 2023, this number dropped to 283,230, and by 2024, it nosedived to 199,826.
The steepest declines were observed in Hyderabad (69% drop, with only 1,328 units available), Mumbai (60% drop, 662 units), and Delhi-NCR (45% drop, 2,672 units). Pune saw a 32% reduction (5,095 units), while Kolkata was the only city to report a 7% increase in affordable housing supply, reaching 10,785 units.
This drastic reduction in affordable housing stock is alarming, especially as India’s urban population continues to swell. Approximately 8% of India’s population resides in Tier-1 cities, and this figure is projected to grow rapidly over the next five years as job seekers flock to urban centers. Experts estimate that India will need 15 million affordable homes in the next half-decade to accommodate this migration and the rise of nuclear families.
Why Are Affordable Homes Disappearing?
Several factors contribute to the shrinking supply of affordable housing:
- Shift Toward Luxury Housing: Developers are increasingly focusing on high-end projects, driven by a surge in demand from India’s growing cohort of high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs). PropEquity reports a 48% increase in the supply of homes priced above ₹1 crore between 2022 and 2024. In NCR, luxury home supply soared by 192%, while Bengaluru and Chennai saw increases of 187% and 127%, respectively. This trend reflects the rising wealth of India’s elite, with 8 lakh HNIs (assets over ₹8.5 crore) and 13,600 UHNIs (assets over ₹250 crore) recorded in 2024.
- Price Appreciation: Post-COVID, property prices in Tier-1 cities have skyrocketed, with some areas like Gurugram and Noida witnessing 400-500% increases over five years. The average apartment price in Tier-2 cities now hovers between ₹90 lakh and ₹1 crore, rendering “affordable” housing a misnomer for most.
- Economic Disparity: While India’s economy and stock market have performed robustly, the benefits are concentrated among the affluent. Salaries in high-paying sectors like tech and finance have surged, fueling demand for luxury homes. Meanwhile, the lower-middle class struggles to keep up with rising costs.
- Developer Priorities: With private land prices in Tier-1 cities ranging from ₹20 crore to ₹50 crore per acre, developers find it unprofitable to build homes priced below ₹1 crore. The average apartment size in India (1,200 sq. ft.) at ₹9,000-₹10,000 per sq. ft. translates to a minimum cost of ₹1.2-₹1.5 crore—far beyond the reach of most salaried workers.
The Luxury Boom: A Tale of Two Indias
While affordable housing dwindles, the luxury segment is thriving. The rise of HNIs and UHNIs, particularly young wealth creators from tech startups, real estate, and stock markets, has fueled demand for opulent homes. In 2024, India ranked sixth globally and third in Asia (behind China and Japan) for its UHNI population, which grew by 6% annually and is expected to increase by 50% by 2028.
Luxury homes are not just residences but investment vehicles offering high returns. However, this focus on premium properties exacerbates the housing crisis for the masses, as developers sideline affordable projects in favor of lucrative high-end ventures.
Solutions to Bridge the Gap
To address the affordable housing shortage, experts propose several measures:
- Government Intervention: Schemes like the Deen Dayal Awas Yojana in Gurugram, which capped per-square-foot prices at ₹4,000, show promise. The government must leverage its vast land banks to incentivize developers through subsidized plots, provided they build affordable homes.
- Financial Incentives: Tax breaks, subsidies, and reduced stamp duty for developers and buyers can boost the supply and demand for affordable housing.
- Policy Reforms: Streamlining regulations and offering home loan concessions for lower-middle-class buyers can make homeownership more accessible.
- Public-Private Partnerships: Collaboration between the government and developers can ensure a steady supply of affordable units, particularly for economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG).
The Road Ahead
India’s housing crisis underscores a growing divide between the affluent and the aspirational. While the super-rich snap up luxury homes, the lower-middle class is left grappling with an acute shortage of affordable options. The CII and Knight Frank India report estimates a shortfall of 31.2 million housing units by 2030, with the greatest demand coming from EWS, LIG, and MIG families.
As India’s urban population grows, the government must act swiftly to ensure that the dream of homeownership doesn’t slip further out of reach. By prioritizing affordable housing through targeted policies and incentives, India can create a more inclusive future where every citizen has a place to call home.
Mumbai Real Estate Crisis: Oversupply and Falling Demand in 2025
