Buying A Home Now More Affordable, With India's Price-To-Income Ratio Dropping Sharply From 88.5 In 2010 To 45.3 In 2025

New Delhi: India’s fast-rising incomes have made buying a home far more affordable over the past decade and a half, with the country’s price-to-income ratio dropping sharply from 88.5 in 2010 to 45.3 in 2025, a new report said on Wednesday. As average income levels have grown more than fourfold -- rising at around 10 per cent annually -- housing prices have increased at a much slower pace of 5–7 per cent a year, data compiled by Colliers India showed. This widening gap has significantly improved the ability of Indian families to purchase homes across major cities.

This improvement comes despite the residential sector experiencing several ups and downs caused by policy changes, economic shocks and new regulations, the report said. Over the past two decades, the market has navigated through major developments such as PMAY, demonetisation, RERA, the NBFC crisis, SWAMIH funding support, and GST implementation. Yet, housing sales have remained strong. In the post-pandemic years, sales in major cities reached 3–4 lakh units annually, driven by better infrastructure, improved affordability, supportive monetary policy and rising incomes.

Experts say the strong sales momentum has been supported by the steady rise in incomes that has outpaced the growth in property prices. According to Badal Yagnik, CEO and MD of Colliers India, housing demand remains robust due to favourable interest rates and higher income levels. “While raw material costs have pushed up housing prices in recent years, the faster rise in incomes has helped buyers keep pace,” Yagnik added. Although the overall affordability picture is positive, conditions vary significantly across cities and micro markets.

Local factors such as demand-supply balance, pricing strategies, and buyer profiles influence how affordability translates into actual sales. Developers continue to offer a range of products at different price points to cater to India’s highly price-sensitive housing market. Across the eight major Tier I cities, affordability levels have improved sharply since 2010. Cities like Ahmedabad and Hyderabad have emerged as some of the most affordable residential markets. GST rate rationalisation on key construction materials is expected to boost sentiment further, especially for affordable and mid-income housing segments, the report stated.

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