'4% Land Enough For All Indians': Startup Investor Explains Why Homes Are Priced Like Gold

India has much than capable onshore to location its full population. Yet, for millions, owning a location feels impossible.

"India conscionable needs 4% of onshore to location its full organization pinch 1 level buildings," writes startup investor Aviral Bhatnagar connected X. But successful cities for illustration Mumbai, homes now waste for ₹50 crore aliases more—priced astir 10 times higher per quadrate ft than moreover American metros.

The disconnect isn't astir onshore scarcity—it’s astir surgery regulation, entrenched corruption, and zoning laws that support prices sky-high.

India’s municipality existent property unaffordability stems from aggregate entrenched issues. A cardinal driver is nan country’s restrictive Floor Space Index (FSI) norms—capped betwixt 1.3 and 3.5 successful metros. 

Compared to New York’s FSI of ~15 aliases Singapore’s ~25, Indian cities limit really gangly buildings tin rise, cramping proviso and inflating onshore values.

Developers further aggravate nan problem. They often merchandise only a fistful of units initially—sometimes conscionable 5 retired of 100 apartments—to create artificial scarcity and jack up prices successful later phases.

Adding to nan dysfunction, existent property remains a preferred parking crushed for achromatic money. In Mumbai, less than 10 families reportedly ain 20% of nan land, while astir 500 families power half nan city's existent estate, concentrating ownership and warping marketplace dynamics.

Sarthak Ahuja, an finance banker and advisor, precocious highlighted nan gravity of nan problem. "If you look astatine nan Price to Income (P2I) Ratio for houses successful India... nan mean P2I has reached 11—which intends you request 11 years of afloat income to beryllium capable to spend a house... and if you presume 50% of your income goes into expenses, that's complete 20 years of savings successful buying a house!" he explained.

Ahuja's proposal is clear: unless you tin salary 50% of a home’s value upfront and support EMIs nether 35% of your nett income, renting remains nan smarter choice. He besides recommends exploring Tier-2 cities, which connection amended affordability and maturation potential.

Published on: Apr 27, 2025 8:55 AM IST