Luxury Versus Affordable Housing

Why developers have shifted toward luxury homes after 2020, why affordable housing margins are thin, and what this means for housing access.

Developers choose which segments to serve.

Recent trend

After 2020, luxury home sales surged in big cities, while the share of affordable homes (under about 40 lakh rupees) in new launches fell, according to property consultants.

Why luxury

Rich buyers had strong incomes and savings.
Higher margins per project.

Affordable challenges

Thin margins when land is expensive.
Buyers are price-sensitive and depend on loans.

Incentives

Tax breaks and PMAY subsidies aimed to boost affordable housing.

Concern

A tilt to luxury leaves middle-income and poor families underserved.

The two launches

A developer launches a luxury tower with high margins while delaying an affordable project on the city's edge.

Thinking developers build what's most needed

They build what's most profitable.

Key takeaways

Luxury sales surged after 2020.
Affordable launches' share fell.
Affordable margins are thin.
Middle-income buyers can be underserved.