'₹80k for 2BHK now reasonable’: Asset manager says India’s middle class is getting squeezed

A construction boom is reshaping India’s big cities but not in the way renters had hoped. New towers are rising fast across Mumbai, Delhi-NCR, Bengaluru, and Hyderabad. Yet rents are only getting steeper.

“Normally, you'd expect that if there's more supply in the market, prices should go down, right?” asks Bengaluru-based asset manager Rohit Sansanwal in a pointed LinkedIn post. 

“But that logic isn’t holding up. At least, not when it comes to rentals.”

Between 2023 and 2025, developers have doubled down on premium and luxury housing projects, catering primarily to HNIs, NRIs, and global professionals. But here’s the twist: many of these homes aren’t meant for living — they’re investment assets.

For the average city dweller — younger families, salaried professionals, and long-term tenants — affordability is slipping further away. While the luxury segment expands, supply of affordable and mid-income housing is shrinking. Builders find higher margins in the top end, and that preference is reshaping the rental landscape.

The result? A steep domino effect.

“A ₹3.5 lakh/month luxury flat in Bandra makes ₹80k for a basic 2BHK seem ‘reasonable,’” Sansanwal points out. In Gurgaon, the launch of DLF’s high-end towers is pushing up rents even in older, less sought-after sectors like 56 and 57.

Because luxury units set new benchmarks, even non-luxury homes in the vicinity are becoming more expensive — despite offering no better quality or amenities. Renters are paying more simply to remain close to schools, offices, and transit hubs.

“Luxury is booming — but livability is straining,” Sansanwal concludes. And if the trend continues, it may soon evolve from a market mismatch into a policy challenge. The gap between what’s being built and what people need is growing wider and for India’s urban middle class, that gap is becoming a financial fault line.