Mid-Income Housing Sales Surge 58% in H1 2026, Affordable Housing Segment Declines 32%

Rising demand for homes priced between ₹1.5 crore and ₹3 crore highlights a growing divide in India's residential property market, while affordable housing faces mounting inventory pressure.

By The Realty Times | Real Estate News Services

New Delhi : India's residential real estate market witnessed a significant shift in the first half of 2026, with sales of homes priced between ₹1.5 crore and ₹3 crore rising by 58%. In contrast, the affordable housing segment, comprising homes priced below ₹50 lakh, recorded a sharp 32% decline amid rising unsold inventory.

The contrasting trends highlight the growing preference for mid-to-premium residential properties and the continuing challenges faced by the affordable housing market.

Mid-Income Housing Emerges as a Growth Driver

The 58% growth in sales of homes priced between ₹1.5 crore and ₹3 crore reflects strong demand for quality housing, better amenities and properties in well-connected locations. Buyers in this segment are increasingly looking for spacious homes, modern facilities and residential developments offering improved lifestyle features.

The segment is also benefiting from demand among financially secure professionals, business owners and families seeking larger homes or upgrading from their existing properties.

Developers have increasingly focused on projects in the mid-to-premium and luxury categories, where demand has remained comparatively resilient. Improved connectivity, urban infrastructure development and the availability of premium residential amenities are also influencing homebuyer preferences.

Affordable Housing Faces Mounting Challenges

While mid-income housing sales have strengthened, the affordable housing segment has come under pressure, with sales of homes priced below ₹50 lakh falling by 32% in H1 2026.

One of the key concerns is the accumulation of unsold housing inventory, which indicates a mismatch between available supply and effective buyer demand in certain markets.

Rising construction costs, higher land prices in urban locations and affordability constraints have made it increasingly difficult for developers to offer homes at lower price points. At the same time, prospective homebuyers continue to face financial challenges related to down payments, home loan repayments and household expenses.

These factors are affecting demand, particularly among first-time homebuyers and lower-income households.

A Growing Divide in India's Housing Market

The divergent performance of these two price segments reflects a broader structural shift in India's residential real estate sector. While buyers with stronger purchasing power continue to support demand for mid-range and premium homes, the affordable housing segment is struggling to maintain momentum.

For developers, this shift could encourage greater investment in projects targeting buyers with higher budgets. However, an excessive focus on premium housing could further widen the gap between the supply of homes and the needs of lower- and middle-income households.

Industry participants will need to balance market demand with the long-term requirement for affordable and accessible housing, particularly in rapidly growing urban centres.

Outlook for the Second Half of 2026

The performance of the residential property market in the coming months will depend on housing affordability, interest rates, employment conditions, infrastructure development and the pace at which unsold inventory is absorbed.

Affordable housing demand could improve if developers introduce competitively priced projects, financing becomes more accessible and government-backed housing initiatives strengthen buyer confidence.

Meanwhile, the mid-income segment is likely to remain an important market for developers, provided price growth does not weaken affordability.

The 58% increase in sales of ₹1.5 crore–₹3 crore homes and the 32% decline in homes priced below ₹50 lakh underline the changing dynamics of India's housing market in H1 2026. The challenge for the industry will be to sustain growth in higher-value housing while addressing the affordability gap and reducing unsold inventory in the lower-priced segment.