19 April,2026 08:37 AM IST | Mumbai | Vinod Kumar Menon
Mumbai is losing out on the cosy 1-BHK. PIC/ISTOCK
The city isn't just becoming expensive, it's inching out the salaried Mumbaikar. For decades, the 1BHK apartment was more than just a housing unit; it was considered as the gateway to urban mobility. It enabled first generation migrants, young professionals, and middle-income families to enter the city's formal housing market and take the first step toward owning a home. Today, that crucial first step is vanishing.
"The seeming disappearance of 1BHKs in Mumbai's new projects is not a coincidence but the inevitable result of structural changes that have been underway for several years," said Anuj Puri, chairman, ANAROCK Group.
"The percentage of affordable housing stock in India's top seven cities has dropped from 40 per cent of new homes in 2019 to only 15 per cent in 2025. In 2019, more than 40 per cent of new homes built were priced below Rs 40 lakh, a price point where 1BHK units are most likely to be found. That share [housing stock] has dropped to just 15 per cent today."
Anuj Puri
Puri further notes that average home sizes in the Mumbai Metropolitan Region have increased over the last fiscal. But this doesn't necessarily mean that the average two- or three-bedroom house is bigger today. Rather, it just means smaller units, aka the 1BHK, are not being constructed.
"ANAROCK data shows that the average size of homes in MMR stood at approximately 890 sq ft in FY 2025, which increased to 930 sq ft in FY 2026. This rising trend indicates a declining share of 1BHK units.
Moreover, out of 40,015 units launched in Q4 FY 2026, only 22 per cent were affordable homes, compared with 31 per cent a year ago. Economic pressures such as high land and construction costs, combined with higher profit margins for larger units, are driving this shift."
According to Pankaj Kapoor, managing director of Liasesforas, "India's residential real estate market entered a phase of structural transition in CY-2025, marked by moderating sales volumes, strong value growth driven by luxury housing, and accelerating developer consolidation." The report (see table), which covers 75 cities across the country, shows that while annual housing sales declined marginally by three per cent to 6,51,067 units, the total sales value rose sharply by 16 per cent to Rs 8.73 lakh crore, highlighting a clear shift toward higher-priced homes and premium demand.
Pankaj Kapoor
Single middles without clubs, pools or play areas are rarely undertaken by developers. "The luxury and ultra-luxury segments emerged as key growth drivers, even as affordability pressures continued to weigh on lower-priced housing segments. The report also notes increasing market consolidation, with larger developers strengthening their position amid rising execution, funding, and compliance challenges for smaller players. At the same time, construction activity has slowed, indicating growing execution risks despite stable inventory levels," he said.
Property prices in Greater Mumbai range from Rs 22,000 to Rs 1,50,000 per sq ft, with an average of Rs 38,700 per sq ft. A typical 400 sq ft 1BHK apartment costs Rs 1-1.5 crore, requiring an annual household income of Rs 20-30 lakh. In comparison, Delhi NCR, Hyderabad, and Bengaluru offer larger 2BHK and 3BHK apartments for the same budget, he pointed out.
Rent versus EMI comparisons reveal further pressures. In many locations, the cost of owning a home (EMI) can be 3.5-4 times higher than the monthly rent for a similar property. Buyers are often forced to either:
>> pay higher ownership costs or
>> move to peripheral suburbs, accepting longer commutes.
Niranjan Hiranandani, Founder of Hiranandani Group, sums up the challenges and potential solutions: "Scarcity of land is a key factor making affordable housing increasingly unaffordable, particularly in metropolitan markets like Mumbai.
The disappearance of 1BHK homes reflects deeper structural issues: soaring land and construction costs, high government levies accounting for nearly half of project expenses, and regulatory constraints such as elevated Ready Reckoner rates, all of which make affordable housing financially unviable for developers."
Niranjan Hiranandani. PIC/ASHISH RAJE
He continues, "In such a scenario, it is unrealistic to expect universal home ownership in dense urban centres. A well-structured rental housing framework is therefore the need of the hour, an approach we at NAREDCO have long advocated."
Dr Hiranandani emphasises that rental housing can serve multiple purposes: meeting the needs of young professionals, migrants, and the urban workforce, while unlocking vacant property and improving affordability. "This, however, requires strong policy support through developer incentives, rationalisation of taxes and duties, and unlocking public land for large-scale rental housing projects," he added.
Gulam Zia, international partner and senior executive director, Knight Frank India, highlights the broader structural shift: "Mumbai's residential market has changed noticeably in recent years. While 1BHK units still form a meaningful part of supply, their relative importance in new launches has moderated. At the same time, the share of 4BHK and larger homes has increased from around three to six per cent, reflecting developers' shift toward premium and luxury segments."
Gulam Zia
Zia notes that much of the current 1BHK supply comes from government-supported projects such as MHADA, CIDCO, and SRA. "But they cannot fully replace private market supply for first-time buyers. Many young professionals are increasingly choosing to rent rather than buy due to high entry costs. This indicates a structural shift in the market: owning a first home in Mumbai is getting tougher, even though demand remains strong."
Industry insiders point to a combination of factors:
>> Rising land and construction costs: Land prices, particularly in central locations, have soared, making low-margin small apartments financially unviable.
>> High government levies: Taxes, stamp duties, and premiums now account for roughly 50 per cent of redevelopment project costs, prompting developers to focus on luxury or larger homes with higher margins.
>> Ready reckoner (RR) constraints: High RR rates prevent developers from selling below certain thresholds, making "affordable" units economically impractical.
>> Declining first-time buyer support: Withdrawal of subsidies like PMAY and rising home loan interest rates (6.5% to 8.5%) have lowered demand, shrinking the 1BHK market.
>> Ultra-premium and luxury housing priced in crores is reigning the market.
>> State supported housing under schemes like Pradhan Mantri Awas Yojana (PMAY), and supply from agencies such as MHADA, CIDCO, and the Slum Rehabilitation Authority (SRA).
>> What is missing is the middle rung, a privately developed, market-driven, affordable 1BHK home.
The decline of 1BHKs is more than just a market trend - it has serious social implications:
Social Mobility: Without affordable starter homes, new residents cannot take their first step in the property market.
Urban Stability: Increased dependence on rentals reduces long-term stability in neighbourhoods.
Policy Pressure: The burden of affordable housing increasingly falls on government schemes and public agencies.
