New Delhi, Jan 22: Amid a rise in the number of affluent Indians, demand for spacious, amenity-rich 3BHK homes has increased sharply, driven by evolving family structures, the need for multifunctional living spaces, higher work-from-home adoption, and a growing preference for future-ready housing. However, rapid escalation in residential prices, rising land and construction costs, and a supply skew towards premium segments have pushed this configuration beyond the reach of the average homebuyer, according to the latest report by proptech firm Square Yards.
The report, From Aspiration to Reality: The Cost of Owning a 3BHK in India, finds that the average cost of a new 3BHK across India’s top five metropolitan cities now stands at INR 2.7 crore. At an annual income of INR 23 lakh, a buyer would need roughly 12 years to purchase such a home in any of these markets. Even at a national level, the average income threshold required to enter India’s top 1%, estimated at INR 22 lakh per annum, offers a similar affordability horizon, highlighting the depth of stress in large-home ownership.
The report also identifies emerging growth centres within cities as income-aligned corridors offering comparatively better affordability for 3BHK buyers. “India’s residential market is witnessing a sharp affordability imbalance, with just 11% of new housing supply currently falling within the affordable segment. The remaining 89% is concentrated in markets where buyers face significant EMI stress, often stretching incomes beyond sustainable levels. Alarmingly, 41% of this supply lies in ‘income-stretch’ markets, where financial pressure begins to intensify,” the report notes.
Bengaluru emerges as the most uniform property market, with affordability relatively stable across corridors, as incomes increased with increasing prices. NCR and MMR show pronounced corridor-level asymmetry, making location choice critical. Hyderabad, a high-growth market, has seen prices outpace incomes, pushing most residential hubs into high-stress zones. Pune, while a hub for young professionals, has wealth-dominated city cores, requiring buyers to consider peripheral locations to afford a 3BHK. The report highlights that choosing the right location can save buyers INR 30-60 lakh, as central and premium areas function more as wealth-dominant or capital-parking markets, whereas emerging and peripheral corridors increasingly bridge aspiration and ownership.
These conclusions are based on an analysis of 10,500 RERA-registered 3BHK units launched between 2024 and 2025 across 44 micro-markets in Bengaluru, Hyderabad, the Mumbai Metropolitan Region (MMR), NCR (including Noida, Gurugram, and Greater Noida), and Pune. For each metro, the report offers a structured buyer playbook segmented by income cohorts. It details suitable options for First Time Buyers within income-aligned brackets, provides curated recommendations for Upgraders in the mid-income segment, and concludes with guidance for HNIs and investors, addressing the preferences and investment priorities of the top 1% of society.
To assess affordability, the study uses the price-to-income ratio (PIR), following an OECD-referenced methodology. PIR measures the number of years of household income required to purchase a 3BHK based on actual home prices and annual incomes. Using this framework, markets are classified into five categories- Affordable, Moderate, Stressed, Severely Stressed, and Crisis, which the report reframes as Income-aligned, Income-stretched, Capital-led, Wealth-dominant, and Institutional & Ultra-luxury markets.
Data show that 48% of 3BHK supply launched over the past year falls within stressed, severely stressed, and crisis markets, where higher-priced segments deliver stronger returns. Developer profit margins in these zones range between 45-50%, compared to 15-18% in affordable or income-aligned markets. “This concentration of premium supply has coincided with a post-pandemic shift in buyer preference, with larger, amenity-rich homes by reputed developers becoming the most sought-after living format. At the same time, a surge in high-net-worth individuals in a positive economic environment has further pushed 3BHK affordability under significant stress”, says Tanuj Shori, Founder & CEO, Square Yards.