A mismatch between housing supply and buyer demand has emerged across Bengaluru, Chennai, and Hyderabad, as residential launches increasingly skew toward larger apartment configurations. According to data from NoBroker, nearly seven in 10 new homes launched in the second quarter of 2026 across these three cities were 3BHKs or larger.
Out of 21,889 residential units launched during Q2 2026, only 6,071 units—representing 27.7 percent of the total supply—comprised 1BHK or 2BHK homes. Nearly 72 percent of the new supply consisted of 3BHKs and larger units. The supply gap was most evident in Hyderabad, where only 61 out of 1,170 launched units, or 5.2 percent, were 1BHK or 2BHK homes.
Developers point to post-pandemic preferences and revenue potential as drivers behind this shift. Vivek Venkateswar, Director of SMP at Shriram Properties, noted that 3BHK units at the firm have increased from 30 percent to nearly 65 percent of the mix, with 75 percent of the buyer base comprising first-time buyers. Similarly, Karthik M V, CSMO at Concorde, stated that the company's current portfolio centers around 2, 3, and 4BHK homes, with 3BHKs gaining prominence in newer developments while 1BHK offerings remain limited.
At the same time, housing prices have outpaced household income growth. In Bengaluru, average ticket sizes rose 84 percent from ₹60.06 lakh in 2019 to ₹1.10 crore in Q2 2026, compared to a 72 percent increase in household incomes. Hyderabad recorded a 95 percent rise in ticket sizes, moving from ₹53.42 lakh to ₹1.04 crore against a 67 percent income growth. Chennai saw ticket sizes increase by 91 percent, from ₹52.66 lakh to ₹1.01 crore, while incomes grew by 70 percent. With average prices at ₹10,450 per square foot, a 1,000 square foot home starts above ₹1 crore, placing homeownership under strain for households earning between ₹60,000 and ₹80,000 a month.
Industry executives highlight that land and construction economics heavily influence development decisions. Bhavesh Kothari, Founder and CEO of Property First Realty, explained that rising land prices in established Bengaluru micro-markets make it challenging to deliver affordable housing. Karthik M V of Concorde noted that smaller apartments carry disproportionately high infrastructure costs relative to their saleable area, including multiple kitchens, bathrooms, plumbing, and parking requirements.
Arhanth Dinesh, Managing Director of Krishvi Group, added that demand alone does not dictate development plans. He emphasized that project feasibility depends on whether a configuration fits the land economics, statutory requirements, and space needs of a specific location, making well-planned 2BHKs at lower ticket sizes increasingly difficult to execute.
"The current mismatch between housing supply and consumer demand in major urban markets highlights the complex economic realities of real estate development. While demand for 1BHK and 2BHK units remains steady among first-time buyers, escalating land and construction costs compel developers to prioritize larger configurations to protect their margins. For entrepreneurs and businesses operating in the real estate sector, balancing affordability with project viability will remain a critical challenge as property prices continue to outpace household income growth." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
