India's housing market splits as affordability weakens in Mumbai, NCR despite lower loan rates: Report
New Delhi, August 1
India's residential real estate market is showing mixed trends, with lower home loan rates improving buyer sentiment in many cities while affordability continues to remain a major challenge in Mumbai and the National Capital Region, according to a market outlook report by real estate developer NBR Group.
The report said the Reserve Bank of India's cumulative 125 basis points of repo rate cuts during the first half of 2026 have reduced borrowing costs and made home loans cheaper, providing support to housing demand across several cities.
"The Reserve Bank of India's cumulative 125 basis points of repo-rate cuts through the first half of 2026 have made home loans meaningfully cheaper, and that relief is filtering through to buyer sentiment in most cities," the report said.
However, the report noted that the benefits of lower interest rates have not been uniform across the country.
It said Mumbai and the National Capital Region continue to remain beyond the reach of the average household on affordability measures, even as residential property prices across India's major cities have increased by as much as 19 per cent year-on-year.
According to the report, the country's housing market is increasingly witnessing different trends across cities rather than moving in one direction.
"Yet Mumbai and the National Capital Region remain stubbornly out of reach for the average household by affordability benchmarks," the report stated.
The report highlighted that Delhi-NCR has simultaneously witnessed a sharp rise in new housing supply despite affordability concerns.
It said new residential launches in Delhi-NCR jumped 39 per cent, indicating that infrastructure-led development corridors are encouraging developers to launch more projects even though affordability remains under pressure.
"Delhi-NCR, somewhat counterintuitively, has also seen a 39 per cent jump in new launches -- proof that infrastructure-led corridor growth can coexist with affordability strain rather than resolve it," the report observed.
Bengaluru, meanwhile, presents a different picture. According to the report, the city has recorded more than 25,000 residential launches during the first half of 2026, the highest ever for a six-month period.
Most of these launches have been concentrated in Bengaluru's southern and eastern growth corridors, suggesting that developers are attempting to match supply with growing demand.
"Bengaluru offers a useful counterpoint: residential launches touched a record half-year figure of more than 25,000 units, concentrated in the city's southern and eastern growth corridors, suggesting supply is at least attempting to keep pace with demand in a way it isn't everywhere else," the report said.
The report said these contrasting trends show that India's housing market is becoming increasingly segmented, with affordability, infrastructure development and supply conditions varying significantly across regions.
According to the report, while lower interest rates are supporting housing demand, they alone are not enough to solve affordability challenges in some of the country's largest property markets.
The report added that India's real estate sector is entering a more mature phase where local market dynamics are playing a greater role than national trends. Instead of moving in a single direction, housing markets across cities are responding differently based on affordability, infrastructure expansion and the availability of new housing supply, making the residential sector more diverse than in previous years.
— ANI
Reader Comments
Finally someone said it! The NCR situation is absurd. They keep launching new projects in Gurgaon and Noida but the prices are just not practical for middle-class families. My husband and I have been searching for over a year now. The 39% jump in new launches means nothing when the per-square-foot rate is beyond our budget. The infrastructure is great, but who can afford it?
Bengaluru is showing the way, honestly. The southern and eastern corridors are booming because they're actually building what people need — apartments that are reasonably priced and close to tech parks. If other cities followed this model instead of only building luxury towers, we might see real change in affordability. But I'm not holding my breath for Mumbai builders to learn this lesson. 😏
I appreciate the RBI's efforts with repo rate cuts, but this report exposes the harsh reality of our market. The issue isn't just interest rates; it's the land prices and the never-ending demand in metros like Mumbai and Delhi. The government needs to step in with more affordable housing schemes and incentives for developers to build budget-friendly units, not just focus on premium projects. Otherwise, we're just going to see a bigger divide between cities.
The Mumbai-NCR affordability crisis is not new, but it's getting worse. Every year we hear about repo cuts, but the rich keep buying properties at inflated prices and developers keep raising rates because they know there's no shortage of high-net-worth buyers. For the rest of us, it's just a distant dream. It's time we accept that unless you have generational wealth or an absurdly high salary, owning a home in these cities is a luxury, not a necessity.
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