Mumbai, one of India's most vibrant housing markets, is currently grappling with significant affordability challenges that are stalling sales momentum. According to the latest quarterly assessment from Housing.com, the residential property landscape has seen a slight revival in supply, but overall market activity remains subdued. High property prices are increasingly pushing the mass housing segment to the sidelines, making it difficult for many prospective homebuyers to enter the market.
During the July-September quarter of 2025, sales across the eight largest Indian real estate markets remained relatively flat, totaling 96,827 units, a marginal increase from 96,544 units the previous year. This represents a 1% decline from the previous quarter, indicating a stagnant market amidst rising costs. Although new supply increased by 3% year-on-year to 94,419 units, this growth is largely driven by a few metro areas that continue to attract developer interest, despite an otherwise lackluster monsoon season.
The primary pressure point in the housing market is within the sub-₹45 lakh category, historically the backbone of urban homeownership in India. Over recent years, steep inflation in land and construction materials, along with rising compliance and funding costs, has prompted developers to pivot toward mid-range and premium offerings, which are perceived as more financially viable. This shift has adversely impacted the affordable housing segment, which is crucial for the sector's long-term sustainability and growth.
Praveen Sharma, CEO of REA India (Housing.com), emphasized that the price increases over the last five years have severely dampened sales in the affordable housing sector, despite a steady underlying demand. He pointed out that while the demand for premium and high-end properties remains robust, supply in the affordable category is constrained. To foster a more balanced market, Sharma advocates for a dual approach: offering incentives for developers and creating improved financing options for homebuyers.
As developers cautiously attempt to re-enter growth mode, the focus remains on navigating these affordability challenges. The market's recovery hinges on the ability to attract buyers back into the affordable housing segment, which requires innovative solutions and collaborative efforts from both developers and financial institutions. Only then can Mumbai and other major cities reclaim their place as accessible housing markets for all income groups.