**Market Brief: The Widening Rift in Indian Housing** **The K-Shaped Reality** As of January 2026, the Indian residential market presents a stark contradiction: soaring values amid shrinking volumes. While total sales value climbed **6–14%** in 2025 driven by premium inventory, actual unit sales contracted by **14%** year-on-year. The market has effectively decoupled—wealthy buyers are driving a luxury boom, while the middle class has been priced out. **Affordable Supply Collapse** The "affordable" segment (units priced under ₹40–45 Lakh) is in freefall. Once constituting over **50%** of the market in 2018, its share has plummeted to just **16–21%** as of late 2025. Developers have pivoted aggressively to high-margin luxury projects (>₹1.5 Cr), which now command nearly **38%** of new supply. This structural shift has left a massive void for entry-level homebuyers, with affordable segment sales dropping **17%** annually. **Price Shocks & EMI Burden** Property prices have surged despite falling transaction numbers. Pan-India prices rose **9%** year-on-year in Q3 2025, with specific markets like NCR witnessing a staggering **24%** jump. Combined with elevated interest rates, this has pushed EMI-to-income ratios in metros like Mumbai to unsustainable levels (approx. **48%**), forcing end-users to delay purchase decisions. **Critical Expectations: Budget 2026** With the Union Budget imminent (February 1), industry consensus demands immediate policy intervention to prevent a permanent lock-out of the middle class: * **Redefining Affordability:** The current price cap of **₹45 Lakh** for affordable housing benefits is obsolete. Stakeholders are urging an increase to **₹75–85 Lakh** for metros and **₹60–65 Lakh** for non-metros to reflect on-ground inflation. * **Tax Relief:** A primary demand is raising the Section 24(b) home loan interest deduction limit from the stagnated ₹2 Lakh to **₹5 Lakh** to offset surging EMIs. * **Supply Incentives:** Restoration of 100% tax holidays for affordable housing developers and deeper subsidies under PMAY 2.0 are viewed as essential to bring supply back to the sub-₹50 Lakh segment. **Market Outlook** Without these corrective measures, 2026 risks cementing a "luxury-only" market structure. The current inventory of approximately **5.6 lakh units** remains stable only because new launches have slowed, but the disconnect between income levels and property prices threatens the long-term health of the residential sector. [Real Estate 2026: Trouble Ahead Or Recovery Already Underway?](https://www.youtube.com/watch?v=EZmqUXVYypE) This video provides a detailed breakdown of the 2025-2026 real estate trends, explaining the disparity between the luxury boom and the affordability crisis discussed in the brief. http://googleusercontent.com/youtube_content/0