THEBUSINESSBYTES BUREAU

NEW DELHI, JANUARY 22, 2026

As the number of affluent Indians grows, demand for spacious and amenity-rich 3BHK homes has surged across major cities, driven by changing family structures, the need for multifunctional living spaces, increased work-from-home adoption, and a preference for future-ready housing. However, the rapid escalation of residential prices, rising land and construction costs, and a supply skewed heavily towards premium segments are pushing 3BHK homes beyond the reach of the average buyer, according to the latest report by proptech firm Square Yards.

The report, From Aspiration to Reality: The Cost of Owning a 3BHK in India, reveals that the average price of a new 3BHK across India’s top five metropolitan cities has climbed to ₹2.7 crore. At an annual income of around ₹23 lakh, a buyer would need nearly 12 years of income to afford such a home. Strikingly, this income level is close to the estimated threshold for entry into India’s top 1% earners, underlining the severity of affordability stress in large-home ownership.

While affordability pressures dominate, the study identifies emerging growth corridors within cities as relatively income-aligned pockets offering better value for 3BHK buyers. It points out that only 11% of new housing supply currently falls within the affordable segment, while the remaining 89% is concentrated in markets marked by elevated EMI burdens. Of this, 41% lies in ‘income-stretched’ zones, where financial stress on households begins to intensify sharply.

City-wise analysis shows Bengaluru as the most balanced market, with incomes broadly keeping pace with property prices across corridors. In contrast, NCR and the Mumbai Metropolitan Region exhibit sharp corridor-level disparities, making location choice a decisive factor for buyers. Hyderabad, despite being a high-growth market, has witnessed prices outstripping income growth, pushing most residential hubs into high-stress categories. Pune, a preferred destination for young professionals, remains wealth-dominated in its core areas, compelling buyers to look towards peripheral locations for 3BHK affordability. The report notes that selecting the right micro-market can translate into savings of ₹30–60 lakh, as central and premium zones increasingly serve as wealth-preservation or capital-parking destinations.

The findings are based on an analysis of 10,500 RERA-registered 3BHK units launched between 2024 and 2025 across 44 micro-markets in Bengaluru, Hyderabad, Mumbai Metropolitan Region, NCR — including Noida, Gurugram and Greater Noida — and Pune. The report offers a structured buyer playbook segmented by income cohorts, with tailored guidance for first-time buyers, mid-income upgraders, and high-net-worth individuals and investors.

Affordability has been assessed using the price-to-income ratio (PIR), an OECD-referenced metric that measures the number of years of household income required to purchase a 3BHK. Based on this framework, markets are categorised as income-aligned, income-stretched, capital-led, wealth-dominant, and institutional or ultra-luxury.

The data indicate that 48% of 3BHK supply launched in the past year falls within stressed, severely stressed, and crisis categories, where higher-priced segments tend to deliver stronger returns. Developer profit margins in these markets range between 45–50%, compared with 15–18% in income-aligned segments. “This concentration of premium supply has coincided with a post-pandemic shift in buyer preferences towards larger, amenity-rich homes by reputed developers. At the same time, a surge in high-net-worth individuals in a favourable economic environment has placed 3BHK affordability under significant pressure,” said Tanuj Shori, Founder and CEO, Square Yards.