Record Property Investment, but Where Are the Affordable Homes?

India’s real estate sector is attracting substantial investment, but a growing share of new housing is being built for buyers at higher price points. The result is an uncomfortable question for a country where access to suitable, affordable homes remains a major urban challenge: is rising investment translating into the housing people need?

A report by FICCI and ANAROCK, covered by The Federal on 25 October 2026, highlights this disconnect. Residential sales value across India’s top seven cities reached ₹6.10 lakh crore in FY2025-26, more than double the ₹2.35 lakh crore recorded in FY2021-22. Yet the composition of new supply changed considerably during the same period.

More money, a different housing mix

According to the report, high-end and luxury homes accounted for 45% of new supply in FY2025-26, compared with 13% in FY2021-22. Meanwhile, affordable housing’s share declined from 25% to 14%.

These figures describe the composition of new supply, not the total number of homes available or the full extent of unmet housing need. They nevertheless point to a market increasingly oriented towards higher-priced homes.

Investment activity has also expanded beyond conventional residential development. FICCI-ANAROCK data reported by The Federal puts private equity investment in real estate at US$6.1 billion across 55 deals during January-September 2026, with data centres attracting the largest share. The figures cover a different measure of activity from residential sales and should not be directly compared with housing sales value.

The wider investment picture is positive for the sector, but it does not automatically indicate that more homes are becoming attainable for first-time buyers or lower-income households.

Why affordable housing can struggle to attract capital

Housing development involves land acquisition, approvals, construction, financing and the risk of delays. Developers and investors weigh these costs against expected selling prices, sales speed and potential returns.

Higher-priced projects can offer larger revenue per unit and may appeal to buyers with greater purchasing power. Affordable projects, by contrast, can face tight margins, expensive land and construction costs, and difficulties obtaining early-stage funding.

Business Standard reported in May 2026, citing ANAROCK Capital, that more than 450,000 affordable and mid-range homes across over 1,500 stalled projects required around ₹55,000 crore in funding support. The report also noted that homes priced below ₹40 lakh accounted for just 10% of new launches in Q1 2026, compared with 26% in 2021.

These estimates use different time periods and definitions, but together they underline the financing challenge facing lower-priced housing.

The policy challenge

The government has introduced initiatives intended to support urban housing and stalled projects. The SWAMIH funding programme has helped complete delayed housing projects, while PMAY-Urban 2.0 aims to support additional urban homes.

However, financing assistance alone cannot resolve every barrier. Land costs, development permissions, access to serviced plots, transport connections and the availability of suitable homes near employment all affect what buyers ultimately pay.

NITI Aayog’s December 2025 report, A Comprehensive Framework to Promote Affordable Housing, identifies several structural constraints, including land supply, housing stock and access to capital. It also highlights the need to distinguish between the existence of housing stock and housing that is genuinely affordable and liveable for the households that need it.

What to watch next

The next test is whether investment growth supports a broader range of housing options, rather than primarily expanding higher-priced supply. Relevant indicators include affordable-home launches, completions and sales; the progress of stalled projects; access to development finance; and the location of new homes relative to jobs and transport.

Investment is essential to a functioning property market. But its wider success should also be assessed by whether it supports homes that people can realistically buy or rent.

Join the attached Vantage Forum discussion: What would make affordable housing more viable for developers without pushing prices beyond the reach of intended buyers? Share a practical solution, relevant experience or evidence that could help move the discussion beyond headline investment figures.