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Real estate sector must look beyond affluent buyers as first-time homebuyers offer the biggest growth opportunity: Experts
At the 22nd CII Realty 2026, industry leaders called for redefining affordable housing, easing home loans and early intervention to prevent stalled projects
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The real estate sector must broaden its buyer base beyond affluent households and focus on first-time homebuyers to sustain growth, industry leaders said at the 22nd edition of CII Realty 2026 in New Delhi on October 28. They called for a revision of the affordable housing definition, better access to home loans and more effective funding mechanisms to address stalled projects.
“The largest untapped pool in Indian real estate is not the top of the market; it is the first home and the first home loan,” said Ashwinder R Singh, conference co-chairman, chairman of the CII Northern Region Committee on Real Estate, and vice-chairman and CEO of BCD Group.
Singh said the industry continued to focus on a relatively small pool of affluent buyers, even as India’s urban population expands and demand for first homes grows.
“You cannot double a market by selling more to the same households. There are around 20 lakh households we keep on selling to. There are around 1.6 million dollar millionaires in this country, and the industry is concentrated on this population of 140 crore people,” he said.
By 2036, nearly three-quarters of India’s population growth is projected to take place in cities, creating a growing pool of households looking to buy their first homes rather than additional properties. Expanding access to home loans and making housing more affordable will be crucial to tapping this demand, Singh said.
The need to broaden the market comes amid a continued shift towards premium housing. Luxury homes account for about a third of housing sales, while prices in the ₹2 crore- ₹5 crore segment grew by around 17-20% in the first quarter, Singh said. Nearly half of recent launches are priced above ₹1.5 crore, making sustained demand a key test for the market.
Affordable housing definition needs a rethink
Industry leaders also called for a revision of the affordable housing price threshold, arguing that the current ₹45 lakh limit does not reflect changes in property prices and household incomes.
Boman Rustom Irani, chairman and managing director of Rustomjee Group and conference chairman, said the definition needed to account for inflation since it was introduced.
“You put a tag of ₹45 lakh in 2017; we are in 2026. By natural inflation, that’s about ₹88 lakh. You have held the definition at ₹45 lakh, which I believe is fundamentally wrong,” Irani said.
He also referred to research indicating that a home of around 60 square metres is an appropriate size for a family to live comfortably, arguing that affordability should be assessed in the context of both home prices and adequate living space.
Anil Saraf, chairman and managing director of ASF Group of Companies, said the industry needed to develop more realistic affordability categories based on household incomes and purchasing capacity.
The ₹45 lakh threshold, he said, no longer reflects the requirements of different income groups. Policymakers could consider linking affordability categories to income levels to make housing schemes more effective and encourage developers to build homes for a wider section of buyers.
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“For a scheme to succeed and developers to be incentivised to build affordable homes, we need to move beyond focusing on luxury properties bought as second, third or fifth homes by wealthy buyers and address India’s actual housing requirements,” the speaker said.
He also called for stronger home-loan benefits for first-time buyers and more affordable borrowing costs. Incentives could be structured around different categories of homebuyers to improve access to homeownership, he said.
The gap between luxury and affordable housing is becoming more pronounced. According to figures cited by Saraf, luxury home sales grew by 14%, while affordable housing sales declined by 9%. Homes priced below ₹50 lakh accounted for just 6% of new launches in the previous quarter, while sales in this price segment fell by 25% in the first quarter.
Saraf said the global economy was increasingly choosing India as a workplace, as reflected in commercial real estate leasing. However, the residential sector had not benefited to the same extent, with demand fluctuating amid high prices, interest rates and a mismatch between the homes being built and what buyers could afford.
Housing sales across India’s top seven cities rose by just 3%, while new launches increased by 18% and unsold inventory grew by 12%, he said. Hyderabad, Bengaluru and the Mumbai Metropolitan Region recorded demand growth, while other major markets saw a decline.
Saraf called for stronger home-loan benefits for first-time buyers and more affordable borrowing costs. He also urged the government to deploy funding for stalled housing projects more efficiently.
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He estimated that stalled projects required around ₹55,000 crore in support and called for an early-intervention mechanism to address financial distress before projects default or enter insolvency proceedings before the National Company Law Tribunal (NCLT).
“Why support them once they go to the NCLT? Why support them once homebuyers have raised a hue and cry? Create a mechanism for something to happen before NCLT proceedings and default,” Saraf said
