Affordable housing gets out of pocket

Despite policy boosts, land costs and lender parity issues are driving the sector off-script, reports Raghu Mohan

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Is the affordable housing plot going off-script?Jatul Anand, executive director of PNB Housing Finance, says that with 1 million homes sanctioned and an additional 141,000 houses approved under PMAY-U 2.0, the scheme is expected to be the catalyst for sustained growth of the affordable housing sector.

PNB Housing has embedded innovations — stepup EMIs, longer loan tenures of up to 30 years and flexible repayment options — that “make it more inclusive, especially for first-time homebuyers and new-to-credit applicants”.

But the ground reality is different. As Anuj Puri, chairman of Anarock Group, sees it: “Affordable housing needs to be close to transit corridors and job centres, not pushed to the edges of cities, as we are seeing in most of the cases now.”

The supply-to-demand ratio for affordable housing in top eight cities plummeted to 0.36 in 2025 (until June), down from 1.05 in 2019, signalling a significant undersupply in the segment, according to a report by Knight Frank India in association with National Real Estate Development Council. Launches have collapsed to barely a third of sales, underscoring a deepening imbalance that threatens to impact housing affordability and limit buyer choice. The share of affordable housing under 50 lakh stood at 17 per cent, a sharp decline from 52.4 per cent in 2018.

A unit is classified as “affordable” when priced at ₹45 lakh or less; it has variables to it: In the metros, it is ₹45 lakh or less with the carpet area capped at 60 square metres; in the non-metros, this is at 90 square metres.