What to know about affordable housing in India: Key trends across major cities

In India’s vibrant real estate market, affordable housing offers a promising chance for homebuyers. Urbanization being all-time high and valuable government incentives, affordable housing makes the dream of owning a home come to life and also acts as an investment choice. Thus, whether you’re buying a home for the first time or looking for a medium of investment, affordable housing offers a smart and practical source for long-term benefits. 

 

What is affordable housing?

The term “affordable housing” can have different meanings for different people. A property, affordable for a certain class of people, can be out of reach for another. Generally speaking, affordable housing means homes that are within the financial budget of a family that is earning income below the median household. 

 

These are the properties that are priced as per such standards that a family spending their major income (usually 30-40%) on housing can still be able to manage other necessities such as food, healthcare, and education.

 

Defining affordable housing in India

 

• Metros: In metropolitan cities, houses priced below Rs. 65 lakh are considered affordable.

 

• Tier II and Tier III Cities: In smaller cities, affordable housing is defined as flats costing less than Rs. 45 lakh.

 

Key factors in classifying affordable housing

In India, affordable housing is not explainable, as different industries, developers, as well as governments, apply various criteria such as size, location, cost, and employment opportunities to define it.

Household income: A family’s income is a prime factor and affordable housing is helpful for families earning below the median income.

Unit size: A property’s price also plays a role as a key factor in classifying affordable housing. Usually, smaller houses are considered more affordable.

Location: Affordable housing is often found in less popular areas but is still well-connected to essential services.

Price: The price of the housing unit.

Employment opportunities: Proximity to job opportunities is crucial, as it reduces commuting costs and makes housing more viable for working families.

 

What does affordable housing mean in different metros

 

In a country as diverse as India, the term “affordable housing” carries different meanings across its metropolitan landscapes. What qualifies as affordable in the streets of Delhi may contrast sharply with perceptions in the cities of Uttar Pradesh. This variation isn’t just geographical; it’s also influenced by various factors such as local income levels, real estate markets trends, and cost of living of each metro area. 

 

Let’s understand the definition of affordable housing, price wise in different metros:

1. Ahmedabad

 

Affordability ratio	21%
Status	Most affordable among major cities.

Price range: Between Rs. 2,500 per sq ft and Rs. 3,500 per sq ft.

1 BHK: Less than Rs. 10 Lakh

2 BHK: Rs. 34 Lakh – Rs. 69 Lakh

Ahmedabad’s low affordability ratio makes it the most budget-friendly city for homebuyers. Consistent loan rates and relatively lower property prices contribute to its high affordability.

Micro-locations

Micro-location/Area	Price Range (Rs./sq ft)
South Bopal	Rs. 4,300 – Rs. 5,800
Gota	Rs. 5,339
Nikol	Rs. 3,850
Chandkheda	Rs. 4,450
Maninagar	Rs. 5,050
Chandra Nagar	Rs. 5,292
Vastral	Rs. 3,450

Average price range: ₹3,000 – ₹4,500 per sq. ft.

2. Kolkata

 

Affordability ratio	24%
Status	Similar to Pune

Average price range: Between Rs. 3,347 per sq ft and Rs. 12,420 per sq. ft.

1 BHK: Rs. 18 Lakh – Rs. 50 Lakh

2 BHK: Rs. 47.8 Lakh onward

Kolkata offers the lowest prices for economy and mid-segment homes among major cities. However, luxury homes are priced higher than those in Hyderabad and Pune. The rate of appreciation for properties is slower.

Micro-locations

Micro-location/Area	Price Range (Rs./sq ft)
Salt Lake City	Rs. 7,350
Tollygunge	Rs. 7,700 – Rs. 8,320
Rajarhat	Rs. 4,950
Dum Dum	Rs. 3,850
Baguihati	Rs. 3,971
Kestopur	Rs. 3,350 – Rs. 4,300
Biddhannagar	Rs. 7,752
Jadavpur	Rs. 6,050 – Rs. 7,261
Garia	Rs. 4,959 – Rs. 5,100

 

Average price range: ₹3,347 – ₹5,580 per sq. ft.

3. Pune

 

Affordability ratio	24%
Status	Similar to Kolkata and Delhi

Average price range: Between Rs. 4,000 and Rs. 8,000 per sq. ft.

1 BHK: Rs. 37.6 Lakh onward.

2 BHK: Rs. 84.8 Lakh onward.

Pune provides affordable housing options with a good mix of budget-friendly areas. Property prices are lower compared to Mumbai and Chennai, making it a viable option for buyers.

Micro-locations

Micro-location/Area	Price Range (Rs./sq ft)
Lohgaon	Rs. 6,050
Kharadi	Rs. 9,245
Wagholi	Rs. 5,750
Katraj	Rs. 6,000
Warje	Rs. 7,363 – Rs. 8,100
Dhayari	Rs. 5,426
Vishrantwadi	Rs. 6,332 – Rs. 7,800
Bhosari	Rs. 6,250

Average price range: ₹3,500 – ₹7,500 per sq. ft.

 

4. Chennai

 

Affordability ratio	25%
Status	Slightly higher than Kolkata and Pune

 

Average price range: Between Rs. 3,036 and Rs 20,651 per sq. ft.

1 BHK: Rs. 34.6 Lakh onward.

2 BHK: Rs. 66.8 Lakh onward.

Chennai offers a range of affordable housing options, though prices in prime areas are higher compared to some other cities. The city has a decent affordability ratio but higher prices in certain localities.

Micro-locations:

Micro-location/Area	Price (Rs./sq ft)
Ambattur	Rs. 5,950
Porur	Rs. 6,762
Arcot Road	Rs. 9,685
Pallavaram	Rs. 8,436
Vadapalani	Rs. 9,250
Perumbakkam	Rs. 5,700

Average price range: ₹31 lakhs – ₹82 lakhs for 1, 2, and 3 BHKs.

5. Bangalore

 

Affordability ratio	25%
Status	Similar to Chennai

Average price range: Between Rs. 3,910 to Rs 19,934 per sq. ft.

1 BHK: Rs. 40 Lakh onward.

2 BHK: Rs. 60 Lakh – Rs. 1.25 crore

Bangalore’s affordable housing market is relatively well-balanced, with a good range of options across different localities. The city maintains a moderate affordability ratio.

Micro-locations

Location	Price (per sq ft)
Chandapura	Rs 2,650 – 5,400
Hoskote	Rs 4,400 – 6,700
Electronic City	₹ 5,850
Kengeri	₹ 5,900
Sarjapur	Rs. 6,118
BTM Layout	₹ 7,800
Nagavara	₹ 7,750
Whitefield	Rs 7,700 – 14,550
Banashankari	Rs. 9,249
Yelahanka	Rs 5,500 – 10,350
KR Puram	Rs 4,950 – 10,250
Malleshwaram	₹ 10,850
Hebbal	₹ 11,600

Price Range: ₹40 lakhs – ₹1 crore.

6. Hyderabad

 

Affordability ratio	28%
Status	Slightly higher than Chennai and Bangalore

Average price range:: Rs. 5,681 per sq. ft. onward

1 BHK: Rs. 30 Lakh – Rs. 50 Lakh

2 BHK: Rs. 74.6 Lakh onward.

Hyderabad’s housing market shows significant price increases but remains relatively affordable compared to Mumbai. The city has a moderate affordability ratio with a noticeable rise in property prices over time.

Micro-locations

Location	Price Range
Uppal	Rs. 4,650 – 7,000 per sq ft
Somajiguda	Rs. 5,953 per sq ft
Jubilee Hills	Rs. 11,150 per sq ft
Friends Colony	Rs. 2,500 – 4,979 per sq ft
Boduppal	Rs. 5,400 per sq ft
Gangaram	Rs. 6,176 per sq ft
Kondapur	Rs. 7,150 – 12,150 per sq ft
Begumpet	Rs. 7,150 per sq ft
Shamshabad	Rs. 6,150 per sq ft
Miyapur	Rs. 5,200 – 7,350 per sq ft

Average price range: ₹5,681 per sq. ft. (H1 2024).

 

7. Delhi

 

Affordability ratio	24%
Status	Moderately affordable

Price range: Between Rs 8,000 and Rs 12,500 per sq. ft.

1 BHK: Rs. 33 Lakh onward.

2 BHK: Rs. 83.3 Lakh onward.

Delhi offers diverse affordable housing options across various localities. The affordability ratio is better compared to Mumbai but varies significantly within the city.

Micro-locations:

Location	Price Range
Khanpur	Rs. 3,600 – 5,059 per sq ft
Madhu Vihar	Rs. 7,200 – 14,000 per sq ft
Sector 24, Dwarka	Rs. 4,375 – 6,250 per sq ft
New Ashok Nagar	Rs. 3,000 – 5,000 per sq ft
Uttam Nagar	Rs. 3,800 – 6,100 per sq ft
Dashrathpuri	Rs. 6,221 per sq ft
Raghubir Nagar	Rs. 5,000 per sq ft
Nawada	Rs. 5,600 per sq ft
Seelampur	Rs. 8,935 per sq ft

Average price per sq ft: Rs. 6,774

Delhi offers diverse affordable housing options across various localities. The affordability ratio is better compared to Mumbai but varies significantly within the city.

8. Mumbai

 

Affordability ratio	51%
Status	Least affordable among major cities.

 

Price Range: Between Rs. 3,100 per sq. ft. to Rs. 4,000 per sq. ft.

1 BHK: Rs. 42 Lac – Rs. 1.45 crore

2 BHK: Rs. 1.5 crore to Rs. 2.75 crore

Mumbai’s high affordability ratio reflects its steep property prices, making housing the least affordable compared to other metros. Even affordable housing options are relatively expensive, resulting in a high EMI-to-income ratio.

Micro-locations:

Location	Price per sq ft
Dombivli	₹ 9,300
Panvel	₹ 12,550
Virar	₹ 8,350
Thane	Rs. 13,447
Borivali	Rs. 5,600
Kandivali	Rs. 8,333
Malad	Rs. 17,389
Ghatkopar	Rs. 18,057
Kurla	Rs. 16,649
Vikhroli	Rs. 17,009
Chembur	Rs. 20,855

Average price range: Rs. 12,601 per sq. ft.

What to keep in mind before choosing affordable housing in India

Investing in affordable housing in India can offer substantial savings and investment potential, but it’s crucial to approach this opportunity with caution. Here’s a detailed look at key factors to consider:

Beware of potential fraud

• • Local real estate dealers: In affordable and less regulated areas, dealers may engage in fraudulent practices. They often exploit the lack of knowledge among potential buyers. Ensure you thoroughly vet any dealer or agent you work with to avoid scams.
  • Unverified Documentation: Many affordable properties, especially in Uttam Nagar, Nawada, Mohan Garden, and Dwarka Mor, may not have their maps (naksha) officially approved. Dealers might mislead buyers by showing attractive interiors while hiding regulatory non-compliance. Verify all property documents and approvals before making any decisions.
     

Check property legitimacy

• • • Inspection of documentation: Ensure that the property has all necessary legal approvals, including building plans and land use permissions. Avoid properties without these documents, as they might face legal issues in the future.
    • Due diligence: Conduct a thorough background check on the property, including its ownership history and any existing disputes. This helps prevent issues related to unclear titles or ownership rights.

Consider quality of living

• • • • Property condition vs. reality: Properties in affordable areas might appear well-maintained and attractive on the surface. However, the reality can be different. Common issues include water logging, theft, illegal extensions by neighbors, inadequate parking, and lack of essential amenities.
      • Local complaints: Research common complaints from current residents. Issues like water scarcity, poor infrastructure, and lack of nearby services are prevalent in some affordable localities.
         

Evaluate amenities and infrastructure

• • • • • Essential services: Assess the availability of basic amenities such as fresh water, sanitation, and transportation. A lack of these services can significantly impact your quality of life.
        • Neighbourhood conditions: Visit the locality at different times of the day to gauge its living conditions. Look for signs of well-maintained infrastructure and community services. 

Investing wisely

• • • • • • Dealership quality: Sometimes paying a bit more for a property from a reputable dealer can save you from future hassles. A good dealer will provide transparent information and ensure that all legal and infrastructural aspects of the property are in order.
          • Long-term considerations: Consider the long-term implications of living in an affordable locality. Evaluate whether the savings on purchase price outweigh potential issues related to living conditions and future property value appreciation.

EMI to income ratio of top 8 cities

Source: Knight Frank research 

 

Source: Knight Frank Research. Note: For H1 2024, affordability and income levels are calculated keeping all variables constant, except for the interest rate

 

In H1 2024, housing affordability remained stable as loan rates held steady since late 2023. Ahmedabad is the most affordable market with a 21% affordability ratio, followed by Pune and Kolkata at 24%. Mumbai is the least affordable, with a ratio of 51%.

Reasons why affordable housing is important in India

 

Reducing social inequality: Affordable housing bridges the gap between socio-economic groups by offering access to housing for people of all income levels.

 

Supporting economic stability: Affordable housing schemes allow people to save their money and invest in other areas, leading to lowering risks of financial crisis.

 

Combat the challenge of urbanization: A majority of the population migrates to urban areas, and often faces issues with buying homes. Low-income groups are commonly forced to settle in slums. Therefore, affordable housing is important for staying in proper apartments with proper hygiene

 

Provide safe and affordable living conditions: As per the planning commission, a shortage of homes is calculated based on: people with no home, people living in unhygienic or unsafe areas, and people living in congested areas. These problems occur because of high interest rates that don’t allow people to purchase their own homes. Hence, so that everybody has a roof over their heads, affordable housing is required.

 

Improve the overall health of citizens: Having a roof over the head can take away significant stress, making people able to focus on their lives and be happy. Affordable homes also help people live in a better environment, raising the quality of life and overall health of individuals.

 

To create jobs: Affordable housing projects also attract jobs as employers working on these projects require employees. This also brings tax revenue to the economy, leaving a positive impact on the economic growth of the country.

 

Housing needs for low-income groups: As lower-income individuals can only afford smaller homes, affordable housing can be beneficial for them.

 

List of affordable housing schemes in India

Central government schemes

 

Pradhan Mantri Awas Yojana (PMAY): The Indian government’s premier initiative for affordable housing is the Pradhan Mantri Awas Yojana (PMAY). First-time homebuyers in both urban and rural locations can take advantage of interest subsidy programs for house loans.

 

• PMAY-Urban: The goal of PMAY-Urban is to supply affordable homes in urban areas. 
• PMAY-Gramin: The PMAY-Gramin program seeks to build reasonably priced homes in rural areas.

 

Rajiv Awas Yojana: The Rajiv Awas Yojana is a state-level initiative designed to give Delhi’s urban poor access to affordable homes.

 

State government schemes

 

• Delhi Development Authority (DDA) Housing Scheme: Provides Delhi with reasonably priced housing options.

 

• Haryana Housing Board: Affordable housing choices in Haryana are provided by the Haryana Housing Board.

 

• NTR Housing Scheme: The NTR Housing Scheme is an affordable housing initiative implemented at the state level in Andhra Pradesh.

 

• Maharashtra Affordable Housing Scheme: Provides Maharashtra with affordable housing options.

 

Other Schemes

 

• Credit-Linked Subsidy Scheme (CLSS):The PMAY’s Credit-Linked Subsidy Scheme (CLSS) offers interest subsidies for housing loans.

 

• Affordable Housing Partnership (AHP): A public-private collaboration concept called the Affordable homes collaboration (AHP) is used to provide affordable homes.

 

• In-situ Slum Redevelopment: A plan called “in-situ slum redevelopment” aims to turn slums into projects with affordable housing.

Note: Depending on the state and the particular scheme, the eligibility requirements, benefits, and particulars of these programs may change. It’s critical to know the necessary conditions and to verify the latest and most current details by contacting the relevant government departments or housing boards.

 

Eligibility for the affordable housing scheme in India

 

Depending on the state and particular scheme, different people may qualify for different affordable housing initiatives in India. However, some general guidelines apply to most schemes:

 

Income criteria

 

Income limits: For the majority of programs, eligibility is based on an income limit. These limits are typically lower than the local average income.

 

Family size: Depending on the size of the family, the income restriction may change.

 

Ownership of property

 

First-time homebuyers:  First-time homebuyers are given priority in many schemes.

 

Existing property: If you currently own a piece of real estate, you might not be qualified.

 

Other Criteria

 

Status as a resident: You might have to live in the state or region in which the program is implemented.

 

Marital status: Eligibility requirements for several schemes are contingent on a person’s marital status.

 

Age: Applicants may be subject to age limitations.

 

Pradhan Mantri Awas Yojana (PMAY)

India’s premier government program, the Pradhan Mantri Awas Yojana (PMAY), aims to provide everyone with affordable housing by 2022. It increases the accessibility of homeownership by providing eligible homebuyers with a range of subsidies and perks.

 

Eligibility criteria of Pradhan Mantri Awas Yojana (PMAY)

 

• Candidates for the Pradhan Mantri Awas Yojana program must be members of the MIG I & II (Middle Income Group), LIG (Low Income Group), or EWS (Economically Weaker Section). 
• An applicant for the Pradhan Mantri Awas Yojana must be younger than 70 years old. 
• An applicant who falls under the Economically Weaker Section (EWS) cannot make more than Rs. 3 lakh per year. Applicants who fall under the Low Income Groups (LIG) must make between Rs. 3 lakh and Rs. 6 lakh annually. 
• Indian citizen women are deemed qualified for this program.

 

Benefits of Pradhan Mantri Awas Yojana (PMAY)

 

Interest subsidy: To lower their monthly payments, qualified homebuyers might get interest subsidies on their mortgages.

 

Stamp duty and registration charges: Certain states provide financial aid for the payment of stamp duty and registration fees.

 

Affordable housing: The program encourages the construction of affordable housing developments all throughout India.

 

Homeownership: PMAY facilitates the realization of the desire of home ownership for a greater number of people.

 

Rajiv Awas Yojana eligibility criteria

 

It is divided into three sections, or eligibility criterion categories A, B, and C.

 

Category A: People who live in urban regions with a population of five lakh or more per dwelling unit (DU) and receive funding up to a maximum of five lakh rupees are classified as Category A.

 

Category B: Those in metropolitan areas classified as Category B receive funding of Rupees Four lakh per dwelling unit (DU) and reside in places with a population of less than five lakh.

 

Category C: People who reside in the North-eastern States and special category states (such as Jammu & Kashmir, Himachal Pradesh, and Uttrakhand) are classified as Category C. It receives set financing of Rs. 5 lakh regardless of the population of the city.

 

Benefits of Rajiv Awas Yojana

 

• This scheme gives cash subsidies to government entities (States/UTs, Urban Local Bodies, and Central Government). 
• Financial assistance is provided under this program to build complexes of affordable housing. 
• The center government offers financial assistance of Rs. 75,000 per Economically Weaker Section (EWS)/Low-income Group (LIG) for 21 to 40 sq. mt. housing units under the affordable housing in partnership (AHP) program. 
• The Rajiv Awas Yojana promotes employment by offering programs for skill development aimed at raising the standard of living.

 

• The scheme will eventually lessen poverty by helping those who live in slums acquire better salaries.

Delhi development authority (DDA) housing scheme eligibility criteria

 

• The applicant must be an Indian citizen over the age of 18.  
• For EWS flats, their annual family income must be below Rs. 10 lakhs. There are no specific income requirements for other flat types.  
• Applicants must not own or leasehold a residential property larger than 67 square meters in Delhi, Delhi Cantonment, or New Delhi.  
• They must also have a PAN card and an active bank account.  
• Both spouses can apply separately, but only one can keep the flat if both are selected.

 

DDA housing scheme benefits

 

• EWS and LIG: 6.5% interest subsidy on loans up to Rs. 6 lakhs. 
• MIG-1: 4% interest subsidy on loans up to Rs. 5 lakhs. 
• MIG-2: 3% interest subsidy on loans up to Rs. 12 lakhs. 
• EWS: Rs. 1.5 lakh assistance for construction or enhancement of new houses. 
• EWS and LIG: Additional support for construction, repurchase, acquisition, or enhancement of houses (EWS: up to 30 sqm, LIG: up to 60 sqm). 
• MIG: Additional support for construction, repurchase, or acquisition of MIG-1 (160 sqm) or MIG-2 (200 sqm) category houses.

 

Haryana housing board eligibility criteria

 

• Age: Applicant must be 18 years or older. 
• Residency: Permanent resident of Haryana. 
• Property Ownership: Must not own a residential home in Haryana. 
• Previous Allotment: No plot/house allotted by Housing Board Haryana in the last 10 years.
   

Income Criteria:

 

• EWS: Up to Rs. 1.8 lakh per annum. 
• LIG: Rs. 1 lakh to Rs. 2 lakhs per annum. 
• MIG: Rs. 2 lakhs to Rs. 4.5 lakhs per annum. 
• HIG: Above Rs. 4.5 lakhs per annum.

 

Haryana housing board benefits

 

• Housing Colonies: Housing Board builds colonies with various housing options and amenities (water, sewerage, lighting, parks, shopping).

 

• EWS Housing Scheme: Annual income up to Rs. 1.8 lakh, no pucca house in urban Haryana.

 

• Hire Purchase Scheme: Lottery system, refunds to unsuccessful applicants. 
• BPL Family Loan Scheme: For BPL families (annual income up to Rs. 1.8 lakh) through the trade and business sector scheme (HSFDC).

 

NTR housing scheme eligibility criteria

 

• You should be a resident of Andhra Pradesh.  
• You should have a white ration card or a below powerty line (BPL) card.  
• You should not own land or house under any other government scheme

 

NTR housing scheme benefits

The NTR housing scheme offers the below subsidies to people who want to build their own homes:

 

• SC/ST Category: Subsidy of Rs. 1.65 lakhs. 
• Other Categories: Subsidy of Rs. 1.16 lakhs. 
• Rural Areas: Additional subsidy of Rs. 1.5 lakhs. 
• SC/ST in Rural Areas: Extra subsidy of Rs. 50,000. 
• Urban Areas (NTR Housing Program): Special subsidy of Rs. 2.5 lakhs.

 

The benefits of investing in affordable housing

 

Faster capital appreciation: Affordable homes often appreciate faster than luxury ones. Buyers can see higher selling prices sooner. Many people prefer affordable housing in suburbs due to city saturation. Buying low and selling high is the key to quicker profits in affordable housing. This benefits buyers, sellers, and developers.

 

Consistent rental income: Affordable housing offers consistent rental income, unlike luxury homes, which often have periods of low occupancy or fewer buyers.

 

Extended support from government: The government has implemented various policies to boost affordable housing, including interest subsidies, credit-linked subsidies, partnerships, and construction assistance schemes. These initiatives have led to a significant increase in affordable housing projects and more favorable home loan terms. Tax relief measures and RBI reforms have further driven demand for affordable housing.

 

Low risk: Affordable housing offers lower risk due to lower investment and government support. Demand for affordable housing is rising, leading to potential for higher resale values. Compared to luxury homes, affordable housing often provides better value, natural views, and improved connectivity.

 

Housing.com POV

Affordable housing can be a very helpful resource for those who have not yet fulfilled their dream of owning a home. There are many benefits and subsidies available under various affordable housing schemes in India. Bridging the gap between various economic classes is mandatory for creating an equal society. It helps reduce social tensions, promotes economic growth, and ensures that everyone has access to basic necessities and opportunities.

 

FAQs

Is it worth investing in affordable housing?

Yes, it is worth investing in affordable housing because of the expected capital appreciation and a steady rental flow.

Why do we need affordable housing in India?

India is in need of affordable housing to overcome the challenges of housing shortages, improve living standards, and to reduce social inequality.

What is the concept of affordable housing?

The concept of affordable housing is to provide accessible housing to a large portion of the population, especially with lower incomes. It includes: government subsidies, incentives, and other measures to make housing more affordable.

Who can apply for affordable housing?

The eligibility criteria for affordable housing can vary depending on the specific program and location. Generally, people who don't own a home and meet certain income limits may qualify.

Where can I find affordable housing in Delhi?

Affordable housing in Delhi is offered by DDA, HUDA, and various private developers.

Affordable housing in India: Who are key builders providing affordable housing?

Key developers of affordable housing in Delhi include DDA, HUDA, Godrej, Mahindra, Shapoorji Pallonji, DLF, and Emaar MGF.

Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com