Mumbai: Buying a home in Mumbai has become increasingly difficult for the average household, even for those with stable incomes. While housing continues to feature prominently in policy discussions, the reality on the ground suggests that affordability remains a major concern as Budget 2026 approaches.
A key problem lies in how affordability itself is defined. At present, homes priced up to around ₹45 lakh are classified as “affordable” under central government norms. However, in Mumbai and large parts of the Mumbai Metropolitan Region (MMR), this amount is insufficient to purchase even a basic residential unit. As a result, many genuine homebuyers are excluded from benefits meant to support affordable housing.
There is a growing demand for this threshold to be revised to better reflect Mumbai’s market conditions. Homebuyers argue that a price range of ₹80–90 lakh would be a more realistic benchmark for the region, allowing more buyers to qualify for tax incentives and housing-related benefits.
Another major challenge is the cost of home loans. Property prices in Mumbai often require buyers to take large loans, resulting in high annual interest payments. While buyers are allowed to claim tax deductions on home loan interest, the current limit of ₹2 lakh for self-occupied homes covers only a small portion of actual interest costs, which can range between ₹4 lakh and ₹6 lakh annually. Increasing this deduction limit could ease the financial burden and improve monthly affordability.
Government housing schemes such as the Pradhan Mantri Awas Yojana – Urban (PMAY-U) have helped buyers in smaller cities, but their impact in high-cost urban markets has been limited. Income caps, loan limits and subsidy structures under the scheme do not align with Mumbai’s pricing levels, reducing its usefulness for city buyers. A metro-specific approach could help make such schemes more effective.
Rental housing is another area that requires attention. With homeownership becoming harder to achieve, a large section of Mumbai’s population depends on rental accommodation. Rising rents and limited regulatory protection have added to household stress. A structured rental housing policy with suitable incentives could help stabilise the market.
On the other hand, construction costs remain high, partly due to the 18% GST on under-construction properties. This tax burden is eventually passed on to buyers, pushing prices higher. A reduction in GST could help lower final property costs.
Infrastructure development also plays a critical role. Better metro connectivity, improved suburban rail services and road expansion make it possible for people to live farther from the city centre, increasing housing options and easing pressure on core areas.
As Budget 2026 nears, the focus will be on whether policy measures translate into real relief for homebuyers. For Mumbai, affordability is no longer about aspiration; it is about making housing financially possible again.
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