Real estate magnate Niranjan Hiranandani has issued a stark warning, declaring that affordable housing in India has been "destroyed" and no longer exists. Speaking at News18's Rising Bharat Summit in Mumbai, Hiranandani attributed this critical situation to escalating land prices, rising construction costs, and substantial government levies, which collectively render homes inaccessible for average buyers.
Hiranandani cautioned that this crisis is set to worsen significantly over the next few years unless immediate policy interventions are implemented. He emphasized the industry's growing inability to deliver homes priced below Rs 50 lakh, calling it a serious economic and social challenge.
The Disappearance of Affordable Homes
When questioned about developers moving away from lower-priced segments, Hiranandani stated, "Affordable housing has been destroyed. It doesn't exist." He elaborated, "Because land, construction cost, development and government charges put together have made it unaffordable. It's a segment of housing which is a disaster. Government and industry will one day pay for it."
Data from the Economic Survey 2025-26 underscores this shift. Homes priced under Rs 50 lakh constituted only 17% of new housing supply across India's eight largest cities in 2025, a dramatic drop from 52.4% in 2018. This reflects a clear and sustained trend towards more expensive residential properties.
Government Charges: A Major Factor
Hiranandani highlighted government-imposed charges as a primary driver of soaring property prices. He cited an example from Mumbai: "For instance, when I sell a house for 40,000 rupees a square foot in Mumbai, 20,000 goes to government first." These charges include stamp duty, labor cess, and various development-related fees, all of which are added to the final selling price.
"Whatever you add on - I'm not talking about unofficial costs; I'm talking about official ones, and I can show you on the document," Hiranandani asserted.
He acknowledged that reducing these charges is problematic, as governments rely heavily on property-related revenues to fund crucial public infrastructure projects like metros and roads. Consequently, stamp duty and ready reckoner rates are unlikely to be lowered.
A Bleak Outlook for the Future
The real estate tycoon warned that the situation is likely to deteriorate further. "It's still going to get worse in the next couple of years," he predicted, citing rising land prices, increasing regulatory costs, and broader inflationary pressures as contributing factors.
Hiranandani also pushed back against the tendency to solely blame developers for the shortage, calling it "a good bogey to have and you can beat them up, but there's a limit." He stressed that the challenge demands a comprehensive policy response involving governments, financial institutions, and private developers.
The Economic Survey also projected a cumulative demand for affordable homes in India to reach 30 million units by 2030. Hiranandani warned that failing to address this urgent housing affordability issue could lead to societal consequences far more severe than current concerns related to youth education.