Behind Bengaluru’s ₹3-crore home boom: CA sheds light on debt story few billboards show

Bengaluru’s skyline is filling up with “Sold Out” boards, glossy hoardings and premium housing launches priced at ₹2-3 crore. To an outside observer, the city appears to be in the midst of a sudden wealth boom. But according to chartered accountant Nitin Kaushik, the frenzy has less to do with rising affluence and more to do with rising leverage.  

In a post on X (formally twitter), Kaushik described what he called the city’s “₹3-crore trap” — a cycle in which salaried professionals are stretching their finances to buy expensive homes, often by committing a majority of their monthly income to loan repayments.  

“If it looks like everyone is rich, you’re probably looking at property prices, not balance sheets,” Kaushik wrote, adding that his view comes not from billboards, but from income tax returns.  

EMIs that own the month  

Kaushik argues that most buyers in the premium housing segment are not purchasing homes with accumulated savings, but financing lifestyles almost entirely through banks. Home loans, car loans and, in some cases, personal loans are being layered together, pushing monthly EMIs to unsustainable levels.  

According to him, it is not uncommon to see EMIs consuming 60-70% of take-home pay for salaried clients. While such loan structures may appear manageable on spreadsheets, the reality is far more brittle. “In real life, the salary is over by the first week,” he said, warning that even a short-term job disruption can force a complete financial reset.  

The traditional tax advantage on home-loan interest under Section 24(b), once a key incentive for homebuyers, has also lost relevance for many high-income earners. Instead of being a benefit, Kaushik notes, the home loan often becomes the single largest expense in a person’s financial life — long before the house is fully owned.  

FOMO meets shrinking supply  

The pressure to buy, Kaushik says, is being driven by fear of missing out rather than affordability. Property prices in Bengaluru rose an estimated 10-12% year-on-year in 2025, while new housing supply has increasingly skewed toward premium projects. Affordable housing, once a stabilising segment, has shrunk to single-digit proportions of new launches.  

As a result, buyers are rushing in not because homes fit comfortably within their cash flows, but because of anxiety that prices may rise further.  

“What if it becomes unaffordable next year?” has become a stronger motivator than “Can I actually afford this today?”  

Real cost of a ₹2-crore loan  

At current home-loan interest rates of around 8.5-9%, Kaushik estimates that a ₹2 crore loan translates to a monthly EMI of roughly ₹1.6-1.8 lakh. To manage that comfortably, a household would need a post-tax income of ₹3.2-3.6 lakh per month just to maintain a sense of normalcy after paying the bank.

“That’s not luxury,” Kaushik wrote. “That’s survival math.”  

Beyond finances, he points to hidden costs that are harder to quantify — rising stress levels, reduced risk tolerance, and the loss of career flexibility as borrowers become locked into high fixed obligations.  

A credit cycle warning  

Kaushik also flagged broader macroeconomic risks. India’s household debt has crossed 40% of GDP in 2026, a level that suggests growing reliance on credit rather than organic wealth creation.  

“This doesn’t look like a wealth boom,” he warned. “It looks like a credit cycle heating up.”  

His message to prospective buyers feeling left behind by rapid sales and soaring prices is a cautionary one: don’t compare liquid savings with someone else’s illiquid, highly leveraged asset. “A house can be an asset,” Kaushik wrote. “But a 70% debt-to-income ratio is not freedom.”