COURTKUTCHEHRY SPECIAL ON MEGA CITY RISING COST OF LIVING
Why Housing Costs Make India’s Mega Cities Unaffordable
Real estate speculation and limited affordable housing drive rents beyond middle-class reach
Policy reforms and urban planning could check prices, but enforcement remains weak
By Our Business Reporter
New Delhi: December 22, 2025:
A recent viral article claimed “Gurugram is not your city if your income is less than ₹3 lakh a month.” While exaggerated, the statement reflects a harsh reality: India’s mega cities have become prohibitively expensive, especially in terms of housing. Families and professionals find that most of their income goes into rent or home loans, leaving little for savings or lifestyle.
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This article examines the reasons behind soaring housing costs, whether these prices are justified, and what the government can do to check them.
Cost of Living in Gurugram and Other Mega Cities
According to estimates, the monthly cost of living for a family of four in Gurugram is around ₹1.3–1.8 lakh excluding rent. Rent for a decent 2–3 BHK apartment in prime areas can range between ₹50,000–₹1.5 lakh per month, depending on location.
Similar trends are seen in Mumbai, Delhi, and Bengaluru, where housing consumes 40–60% of household income. Rising property prices have pushed middle-class families to the outskirts, increasing commute times and reducing quality of life.
Why Housing Costs Are So High
1. Urbanisation and Migration
Mega cities attract millions of migrants seeking jobs. Demand for housing far outpaces supply, especially in business hubs like Gurugram and Bengaluru.
2. Speculative Real Estate Investment
Developers and investors treat property as a financial asset, driving up prices beyond affordability. Empty luxury apartments are common, while affordable housing remains scarce.
3. Limited Land and Poor Planning
Restricted land availability, coupled with weak urban planning, leads to artificial scarcity. In cities like Mumbai, geography itself limits expansion.
4. High Construction and Regulatory Costs
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Taxes, stamp duties, and compliance costs add to housing prices. Developers pass these costs to buyers and tenants.
5. Lifestyle Premiums
Areas with malls, offices, and metro connectivity command higher rents. Gurugram’s Cyber City and Golf Course Road are prime examples.
Are These Costs Justified?
Experts argue that housing costs in mega cities are not justified by average incomes. While top executives may earn ₹3–5 lakh per month, the median urban household income is far lower.
- Mismatch with wages: Salaries in IT, finance, and startups have risen, but not enough to match housing inflation.
- Speculative pricing: Many properties are priced for investors, not residents.
- Social inequality: High rents push middle-class families to distant suburbs, creating socio-economic divides.
Thus, while demand explains part of the rise, exorbitant costs are largely speculative and unsustainable.
Can Government Check Soaring Prices?
1. Affordable Housing Schemes
Programs like Pradhan Mantri Awas Yojana (PMAY) aim to provide affordable homes, but implementation in mega cities is weak. Expanding such schemes could ease pressure.
2. Regulating Speculation
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Governments can impose higher taxes on vacant luxury properties and discourage speculative buying.
3. Urban Planning and Land Use
Better zoning, vertical housing, and infrastructure expansion can increase supply. Cities like Singapore and Tokyo show how planned growth keeps housing affordable.
4. Rental Housing Policy
India lacks a strong rental housing framework. Encouraging institutional rental housing could stabilise rents.
5. Public Transport Expansion
Improved connectivity to suburbs reduces pressure on central areas, making housing more affordable.
Expert Views
Urban economists note that unchecked speculation has made housing a “luxury commodity” rather than a basic need. Activists argue that without government intervention, mega cities risk becoming exclusive enclaves for the wealthy, pushing out middle-class families.
Conclusion
The claim that Gurugram requires ₹3 lakh a month to live comfortably may be exaggerated, but it reflects a real affordability crisis in India’s mega cities. Housing costs dominate family budgets, driven by speculation and poor planning.
The government can check these soaring prices through affordable housing schemes, regulation of speculative investment, and better urban planning. Without intervention, India’s mega cities risk becoming unaffordable for the very workforce that sustains them.
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