Supply Boom Skews Towards Luxury
The discrepancy between household budgets and developer offerings in Bengaluru has widened significantly. Analysis reveals that since 2022, for every affordable home priced below ₹80 lakh, developers have launched five properties above this threshold. This concentrated supply in the ₹80 lakh to ₹3 crore range far exceeds the purchasing power of many residents, despite Bengaluru's average per capita income.
The Affordability Gap
The Karnataka Economic Survey pegs the average per capita income at ₹7.6 lakh, suggesting a household could realistically afford a home around ₹76 lakh. However, recent data indicates only 33,831 units fall below this mark. Most new constructions are priced between ₹80 lakh and ₹3 crore, with even "affordable" units clustering between ₹65-80 lakh, leaving limited options for lower-income households. Adding to the burden, 75% of new units remain under construction, forcing residents to pay rent and EMIs simultaneously.
Spatial Segregation Deepens Divide
Geographic distribution further exacerbates the affordability crisis. Higher-priced homes (₹80 lakh to ₹1.2 crore) are situated within 8-16 km of the city center, benefiting from better infrastructure and connectivity. Conversely, units priced below ₹80 lakh are pushed to the periphery beyond the 16-km radius. These outer areas often lack essential services like municipal water and sewerage, alongside fragmented public transport, rendering these "affordable" homes practically unaffordable once hidden costs are factored in.
Market Dynamics and Intervention Needs
Private developers often cite higher upfront costs and demand risk for affordable projects, contrasting with the faster returns and higher margins in the luxury segment. This market inclination towards premium housing reinforces income and spatial inequalities. Experts argue that market forces alone cannot resolve this imbalance, necessitating deliberate state intervention. Government-led development, public-private partnerships, and regulatory mandates are identified as key levers, though each faces significant execution and financial hurdles.
The path forward requires enforceable measures, such as zoning and land allocation in prime areas, to ensure developers contribute to affordable housing stock. Failure to act risks undermining Bengaluru's economic competitiveness by failing to house its essential workforce. Published March 31.