The dream of owning a home in India, particularly in its bustling metropolitan cities, is increasingly becoming a distant reality for many, even those earning a substantial monthly salary. Recent discussions on social media have highlighted this growing concern, sparked by a viral post about an individual earning ₹1.2 lakh per month still struggling to afford a decent home in Gurugram. This situation underscores the widening gap between income and property prices, raising questions about housing affordability and the true meaning of financial success in today's India.
The viral post on X, shared by a tech professional, detailed the plight of his friend, who, despite earning an annual package of ₹20 lakh (approximately ₹1.2 lakh monthly in hand), finds it impossible to buy a home in Gurugram with reasonable amenities without living paycheck to paycheck. The post mentioned that most projects he visits start at ₹2.5 crore, boasting luxurious amenities like infinity pools and Italian marble, features that come at a steep price. This scenario is not unique to Gurugram; similar stories echo across major Indian cities like Mumbai, Hyderabad and Bangalore, where skyrocketing real estate prices are outpacing income growth.
Several factors contribute to this growing unaffordability. One significant aspect is the rapid appreciation of property values, especially in metropolitan areas and newer micro-markets. Data indicates that housing prices in the top seven cities in India have risen significantly in recent years, with some areas experiencing jumps of up to 30% annually. Delhi-NCR, for instance, recorded the highest yearly jump in average residential prices. Peripheral areas around major cities have also seen substantial price increases, driven by increased demand and limited availability.
Another factor is the increasing focus on luxury housing projects. Developers are increasingly targeting the high-end segment, incorporating premium amenities that drive up prices. While luxury housing sales have seen tremendous growth, this trend leaves middle-income earners with fewer affordable options. According to real estate experts, the luxury and ultra-luxury segments are expected to grow faster than affordable housing, further exacerbating the problem.
The high cost of living in major cities also plays a crucial role. While an average monthly salary of ₹1.2 lakh might seem substantial, a significant portion goes towards essential expenses such as rent, transportation, education, and healthcare. This leaves little room for saving for a down payment, which is a significant hurdle for prospective homebuyers.
The situation has sparked a widespread debate about the factors driving up real estate prices and the measures needed to address the affordability crisis. Some experts suggest that speculative investments and the circulation of black money in the real estate market contribute to artificial inflation of property values. Others point to restrictive land use regulations, inefficient planning systems, and slow supply responses as key challenges.
Potential solutions include government incentives for first-time homebuyers, disincentives for multiple property purchases, and streamlining the regulatory approval process to increase the supply of affordable housing. Some social media users have suggested considering ancestral homes in villages, where a comfortable life is possible with a fraction of the cost in metropolitan cities. However, this is not a viable option for everyone, given the career opportunities and lifestyle preferences associated with urban living.
The Reserve Bank of India (RBI) indicates a modest increase in the All-India House Price Index, while other research indicates much stronger price appreciation in major cities. Forecasts suggest that average home prices will continue to rise in the coming years, driven by demand from wealthy individuals. This could mean that homeownership remains a distant dream for many, even those earning relatively high salaries.
The debate highlights the need for a multi-pronged approach involving government policies, real estate developers, and financial institutions to address the growing affordability crisis. Innovative solutions such as public-private partnerships, affordable housing schemes, and flexible financing options are essential to ensure that homeownership remains within reach for a larger segment of the population. Ultimately, addressing the housing affordability challenge is crucial for ensuring inclusive growth and promoting the well-being of India's citizens.
