It’s a striking comparison: Mumbai, India’s financial capital, has only 154 skyscrapers. Meanwhile, New York towers with 893, and Hong Kong takes the lead with 3,316. Financial expert Pranjal Kamra recently unpacked this discrepancy in a viral LinkedIn post, revealing a harsh reality—India’s housing market is failing the middle class. His analysis points to a toxic mix of unaffordability, skewed incentives, flawed planning, and systemic inefficiencies.
Between 2020 and 2024, household incomes in India have grown at a humble 5.4% CAGR, while property prices surged at 9.3% CAGR. The outcome? A dramatic drop in affordable housing—homes under ₹1 crore have declined by 36% in just two years. According to Kamra, “Affordability is vanishing fast,” especially for the middle class, which now finds itself priced out of even modest urban housing.
So, why aren’t developers building for the middle-income segment anymore? It comes down to margins. Developers are gravitating toward the luxury market, where the profit per unit is significantly higher. Kamra explains that building a ₹3 crore home offers much better returns than constructing a ₹1 crore flat. Add to this the rising costs of land, construction, and borrowing, and you get a market heavily skewed toward the elite. The luxury housing supply tells the story—up 192% in NCR, 187% in Bengaluru, and 127% in Chennai.
Two critical affordability indicators are now flashing red. First, India’s Property-to-Income (PTI) ratio has reached 11, more than double the global benchmark of 5. In simple terms, an average Indian family would need to save 11 years of their full income—without spending a single rupee—to afford a home. Second, the EMI-to-Income ratio has risen to 61%, far above the global comfort level of 50%. That means families are left with just 39% of their income for everything else—groceries, school fees, healthcare, and life in general.
Even when affordable housing is built, it’s often placed too far from employment hubs to be practical. Outdated zoning laws and the lack of a robust, future-focused master plan push developers to cheaper land on the fringes of cities. The result is longer commutes, poor infrastructure, and further economic stress for working families.
Kamra also points to two deeply rooted structural issues: India’s low Floor Space Index (FSI) and the persistence of black money in real estate. The FSI, which controls how much can be built on a given plot of land, is too restrictive in cities like Mumbai. This stunts vertical growth in a city that desperately needs it. Meanwhile, black money inflates property values through underreported sale prices and cash transactions, creating an artificial price floor that honest buyers can’t compete with.
To illustrate, Kamra gives a stark example: If a buyer pays ₹60 lakh in cash and only reports ₹40 lakh on paper for a ₹1 crore home, they save around ₹12 lakh in taxes. But who gets penalized? The honest, salaried, tax-paying middle-class family. They pay full price, full tax, and get very few realistic housing options in return.
In summary, Mumbai’s modest skyline is not a design flaw—it’s a symptom of deeper economic and policy failures. Developers chasing luxury margins, affordability ratios spiraling out of control, outdated urban planning, FSI restrictions, and a shadow economy of black money have all contributed to a housing market that excludes the very people who fuel the city’s growth.
The Indian middle class isn’t losing the housing game—it was never invited to play.
