India’s housing market, particularly in Mumbai, may be entering a new phase as changing economic conditions begin to reshape demand patterns. Real estate analyst Vishal Bhargava has indicated that the recent dominance of larger homes could give way to renewed interest in more affordable housing formats.
Data shows that new launches of 1BHK apartments in Mumbai declined sharply by nearly 50% in 2025, dropping to around 9,786 units compared to an earlier annual average of nearly 20,000. This shift followed a post-pandemic trend where developers prioritised larger configurations such as 2BHK, 3BHK, and 4BHK homes, driven by higher profit margins and increased demand from affluent buyers benefiting from stock market gains and startup wealth.
As a result, the average price of new homes in the city has climbed to nearly Rs 3 crore, making compact housing increasingly inaccessible for middle-income buyers. Bhargava noted that this imbalance may now begin to correct as affordability concerns intensify and market momentum slows.
“Mumbai has forgotten the middle-class… As the market slows down further, Mumbai will once again remember the middle-class.”
The reality on the ground reflects this shift. Affordable 1BHK homes under Rs 1 crore have become scarce within the city, with most options pushed to peripheral areas such as Thane, Mira Road, and beyond. Buyers have also pointed out that many so-called 2BHK units are being marketed within compact layouts that were earlier typical of 1BHK homes.
While some argue that evolving aspirations favour larger homes, the broader concern remains affordability. With incomes not keeping pace with rising property prices, the market may be compelled to rebalance, potentially reviving demand for smaller, budget-friendly housing options in the near future.
Source: The Economic Times
