Indians hunting for a home have had a rough few years. Prices kept climbing, interest rates stayed high, and salaries simply did not keep up. That equation is now shifting — slowly, but in the right direction.
Property consultancy CBRE released its India Residential Market Outlook 2026 on Thursday, and the headline finding is this: housing affordability across India’s big cities is expected to stabilise over the next two years. Not improve dramatically, Not crash, Stabilise — which, given where things have been, counts as progress.
The Number That Tells the Story
CBRE tracked what economists call the EMI-to-income ratio — essentially, how big a bite your home loan takes out of your monthly pay cheque. The firm studied this figure across Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, and Pune, covering buyers across three income brackets from 2021 to 2028.
Between 2021 and 2024, that ratio moved in one direction only: up. Property prices ran ahead of salaries, the Reserve Bank raised rates repeatedly, and the monthly cost of servicing a home loan ate deeper into household budgets year after year.
That trend is now expected to stop. From 2026 onward, CBRE projects the EMI-to-income ratio will hold steady across income groups in most major cities. No dramatic reversal — but the bleeding stops.
Why Now
Three things are happening at once.
Borrowing costs are coming down. After years of rate hikes, the RBI has shifted toward easing, and that feeds directly into lower EMIs on new loans.
Property price growth is slowing — still positive, but no longer running at the pace that left wage earners standing still. And incomes themselves are rising faster than they have in recent years, partly reflecting broader wage growth and partly India’s expanding formal employment base.
For the first time since 2021, CBRE says, household incomes are on track to grow faster than property prices. That is the key reversal the market has been waiting for.
The Luxury Segment Played by Different Rules
While ordinary buyers were getting squeezed, the top end of the market was having a party.Premium and luxury homes made up about 27 percent of total residential sales in 2025 — and that segment grew more than 30 percent over the previous year. The buyers shopping in that bracket are largely unconcerned with EMI ratios. They were spending anyway, and they did. Across all segments, 2025 was a solid year on paper. New launches and total sales both crossed 2.7 lakh units, suggesting the market stayed busy even while affordability stayed tight for mid-range buyers.
What Comes Next
CBRE ties its housing outlook to India’s broader income story. The country is targeting upper-middle-income status by 2030, and if that trajectory holds, a larger share of the population will cross the threshold where buying — rather than renting — becomes a realistic choice. That expanding buyer base is the structural argument for continued housing demand over the rest of the decade. The near-term argument is simpler: rates are falling, price growth is cooling, and pay packets are growing. Put those three together and 2026 starts to look like a better year to be a homebuyer than any since before the pandemic recovery ran out of steam. None of this means homes will suddenly become cheap. In Mumbai or Delhi, that is not happening. But for buyers who have been sitting on the sidelines waiting for some relief, the wait may finally be getting shorter.
