Housing Affordability in India Nearly Doubles in 15 Years as Incomes Outpace Property Prices: Colliers

India’s housing market has entered a phase of sustained affordability and broad-based demand, with most Tier I cities showing sharp improvements in the housing price-to-income ratio over the past 15 years, according to newly released data from Colliers. The consultancy’s analysis shows that average affordability — measured through the price-to-income (P/I) ratio — has strengthened steadily, falling from 88.5 in 2010 to 45.3 in 2025.

The improvement is driven primarily by robust income growth. Average per-capita incomes have grown more than four times since 2010, rising at a compound annual rate of nearly 10%. In contrast, housing prices have climbed at a relatively moderate 5–7% CAGR during the same period, making home purchases comparatively easier across major cities.

Colliers notes that while national-level affordability has improved, local variations remain significant as micro-market dynamics depend heavily on supply pipelines, buyer income profiles, and segment-specific pricing. Developers, aware of India’s sharp price sensitivity, have increasingly diversified their offerings to cater to distinct buyer segments.

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Top metros, including Bengaluru, Hyderabad, Ahmedabad, and Pune, have recorded the steepest improvement in P/I ratios. Mumbai, despite remaining India’s most expensive residential market, has also seen affordability strengthen meaningfully—from a ratio of 120.8 in 2010 to 60.6 in 2025.

The research highlights the influence of policy and credit trends on housing sentiment. Post-pandemic monetary easing, improvements in repo rate transmission, and the recent GST rationalization for construction materials have collectively supported buying momentum. With the repo rate now at 5.5%—the lowest since early 2022—Colliers expects borrowing costs to ease further if inflation remains benign.

India’s banking system has also played a pivotal role in sustaining the residential cycle. Outstanding housing loans have ballooned from ₹3 lakh crore in 2010 to over ₹30 lakh crore by October 2025. Housing now accounts for nearly 17% of total bank credit, up from about 10% in 2010, reflecting rising lender confidence in end-user–driven demand.

Infrastructure expansion is reshaping growth corridors, with expressways, metro networks, and new airports accelerating residential movement toward peripheral zones. While cities like Ahmedabad, Hyderabad and Bengaluru already show balanced growth between central and fringe areas, metros such as Mumbai and Delhi NCR continue to exhibit wide price gaps — though those differentials are gradually narrowing.

Colliers expects the affordability cycle to remain intact, supported by income growth, policy support and continued institutional participation. A more refined definition of affordable housing, it adds, could further unlock demand among lower-income households and improve credit access across city tiers.