Across India’s top cities, the dream of owning a home is quietly slipping further out of reach. While residential sales appear to be slowing, the reasons go beyond simple price increases. A deeper issue lies in how the housing supply itself is shifting. Developers, in pursuit of larger margins, are moving away from smaller apartments and launching increasingly large sized flats, which has effectively left a major chunk of middle income buyers without viable choices.
In cities like Bangalore, the trend is striking. Fewer and fewer one and two bedroom units are being launched compared to earlier years. According to data from TruBoard Partners, the share of 1BHK homes in Bengaluru’s total residential sales has dropped from 9 percent in 2022 to just 6.7 percent by mid 2025. Two bedroom units, once the sweet spot for urban buyers, have also seen a sharp fall, declining from 40 percent to 27.2 percent in the same timeframe. Meanwhile, 3BHKs have increased their share significantly, climbing from 45.3 percent to 52.7 percent.
A similar story is playing out across other major cities. In Gurugram, 1BHK sales are nearly nonexistent at below 1 percent of total transactions. Even the share of 2BHKs has dropped drastically. In Mumbai, although the presence of smaller flats is still relatively higher, the shift toward larger homes is clear. The share of 3BHKs has risen, while the availability of 1BHKs has fallen by more than 6 percentage points over the last three years.
The consequences are far reaching. Larger flats come with larger price tags. A 3BHK unit in Bangalore, for example, now averages 2,200 square feet, almost double the size of a typical 2BHK, and costs upwards of ₹15,000 per square foot. This means buyers are not only dealing with inflated ticket prices, but also with significantly higher maintenance and tax burdens.
Adding to this strain is the issue of loading, the portion of a property’s price that covers common areas rather than livable space. Loading levels have surged across the Mumbai Metropolitan Region, Delhi NCR, and Bengaluru, crossing 40 percent in some cases, up from around 30 percent just a few years ago. This means buyers are paying for more space than they actually get to use, making homes feel even less affordable despite the steep cost.
Industry experts like Mayank Saksena from Anarock and Vivek Rathi from Knight Frank India agree that the shift toward larger homes is squeezing out budget conscious buyers. With developers turning their focus away from affordable housing due to thinner profit margins, buyers are now forced to either extend their budgets or move to far off suburbs where prices remain within reach.
The result is a market that is increasingly disconnected from demand. While large homes may yield better returns for developers, they do not reflect the needs of most urban buyers today. Many of these buyers are informed and cautious. According to Amit Bagri of Kotak Mahindra Investments, the once prevailing fear of missing out has now given way to a wait and watch mindset. Buyers are in no hurry, especially when prices seem unlikely to rise in the immediate future.
Recent reports also show that sales across all property segments from affordable to luxury have been hit, declining by 15 to 20 percent in some regions. In areas like the National Capital Region, investors are stepping back due to stagnating prices. Even large firms like Tata Realty & Infrastructure have reported slower sales, citing a combination of legal hurdles, market saturation, and buyer hesitancy due to global uncertainty.
In response to changing demand, developers are beginning to tweak their strategies. Smaller formats of 3BHK and 4BHK units are being launched in some cities to match buyer affordability. But experts warn that unless there is a more concerted push toward designing and delivering homes that cater to the majority, the affordability crisis will deepen further.
What lies ahead is a delicate balance. The industry must reconcile the economics of construction with the real needs of urban Indian families. Until then, the dream of home ownership for many will continue to drift toward the distant edges of the city and perhaps, even further away.
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