Fact-Check: "Real Estate Is Too Expensive"

Claim: Real estate has become too expensive to invest in. Verdict: Partly true — but incomplete enough to be misleading.

It's one of the most repeated lines in Indian real estate conversations, usually followed by a shrug and a decision to wait. And it's not baseless—there's real data behind it. But "real estate" isn't one market with one price tag, and treating it like one is exactly how good opportunities get dismissed along with the overpriced ones. Here's what the claim gets right, what it leaves out, and what that means if you're actually trying to make a decision.

What the Claim Gets Right

This part checks out. Residential prices across India's eight major cities crossed a symbolic threshold in early 2026, with the weighted average reaching ₹10,050 per square foot — the first time the national figure has broken into five digits. Some cities moved far faster than the average: Bengaluru posted 24.2% year-on-year growth, and Pune logged a 9% jump in a single quarter, a pace analysts flagged as an early warning sign for affordability strain.

The burden shows up at the household level too. The share of Indian households spending over 30% of their income on housing costs rose to 22.4% in 2023, up from 19.4% in 2015 — a measurable, real tightening. And notably, a recent cut in GST on cement wasn't passed on to buyers at all; developers absorbed it as margin instead of lowering prices.

So if "real estate" means a flat, an apartment, or a plot in one of India's established metro markets, the expensive label is fair, and getting more so.

What the Claim Leaves Out

Here's where it falls apart as a blanket statement: the national average is hiding two very different markets sitting inside one number.

City matters more than "India" as a category. Housing affordability is typically measured as the EMI-to-income ratio—the share of a household's monthly income that goes toward a home loan payment. Anything under 50% is generally considered affordable; above it, buying starts to strain a household's finances. On that measure, Mumbai sits around 57%, solidly in unaffordable territory. Ahmedabad, by contrast, has the lowest ratio among major cities at roughly 23%, with Kolkata at 25% and Pune at 28% — all comfortably affordable. "Real estate is expensive" is a very different statement in Mumbai than it is in Ahmedabad.

Segment matters as much as city. The price growth driving the headlines is concentrated at the top. Premium and luxury housing — the ₹2–20 crore range — is the segment developers are building for and where demand has stayed strongest, supported by affluent domestic buyers and NRIs. Mid- and lower-ticket housing, meanwhile, is growing far more slowly, held back by limited new supply in that band rather than lack of demand. Sales volumes across India's top seven cities actually fell around 14% in 2025, even as total sales value rose 6% — a sign that fewer transactions, at much higher prices, are what's pushing the averages up. That's a luxury-segment story wearing a national-market headline.

The financing side is quietly improving. Roughly 125 basis points of cumulative rate cuts have brought home loan interest rates down over the past several months, easing EMI pressure for many buyers in the first half of 2026. Looking further out, CBRE's Housing Affordability Index projects something notable: for the first time since 2021, household income growth is expected to outpace property price appreciation between 2026 and 2028 — meaning the affordability picture, city by city, is more likely to stabilize than worsen from here.

So Is Real Estate "Too Expensive"?

The honest answer: it depends entirely on which real estate you mean.

If the reference point is a metro apartment in an already-mature, supply-constrained micro-market, the claim holds — and the data backs it convincingly. But the same rupee amount looks completely different in an emerging investment corridor still in its infrastructure build-out phase, where plot prices are priced in thousands per square yard rather than tens of thousands per square foot. Gujarat's own affordability numbers make the point: the state's largest city already has the most favorable EMI-to-income ratio in the country, and its planned investment regions — Dholera SIR among them — are priced at a fraction of established-metro rates precisely because the infrastructure and demand curve haven't caught up yet.

"Too expensive" is true of a market. It isn't true of a category. Painting all of real estate with the same brush is how buyers end up avoiding both the properties that are genuinely overpriced and the ones that genuinely aren't.

Curious where the affordability math actually works in your favor right now? Get our current price comparison across major cities and emerging investment zones, or read our related breakdown on why prices move after infrastructure is built, not before.

Sources: CBRE India Housing Affordability Index 2026, RealInsight Residential Report — PropTiger/Aurum PropTech, Q1 2026, Housing Affordability in India, H1 2026, Forbes India — World Cities Report 2026. Figures are drawn from third-party market research current as of publication; verify current rates before making an investment decision.