While soaring land prices have emerged as a key factor making apartments increasingly unaffordable in Bengaluru, developers argue that regulatory bottlenecks remain the bigger challenge. The debate comes amid growing discussions around housing affordability, including viral social media posts comparing how Indian professionals can buy homes in cities such as London or Dubai but struggle to do so in Bengaluru, or other Indian cities.

Industry executives say land inflation has significantly outpaced construction cost increases, pushing up project costs. However, they contend that delays in approvals, land-use conversions, registrations and other regulatory processes continue to be the primary constraint on housing supply and urban development.

“The larger challenge today is not construction capability or even land availability. Land is available at a price, but the biggest constraint continues to be approvals and transaction-related processes associated with land,” said Murali Malayappan, Chairman and Managing Director of Shriram Properties.

He pointed to multiple layers of approvals, including B Khata-to-A Khata conversions, land-use changes, registrations and other compliance requirements. “These delays impact not just developers and project timelines, but also the pace of urban development in Bengaluru,” he said.

Malayappan added that construction cost inflation has remained relatively modest compared with the sharp rise in land prices across Bengaluru over the past few years.

According to Sridhar Volesari, Vice President-Business Development at Concorde, between 25 per cent and 40 per cent of recent apartment price increases can be attributed directly or indirectly to higher land costs, with the balance coming from construction inflation, financing expenses, compliance costs, amenities and margin protection.

While approvals and construction remain important, Volesari said the bigger challenge is increasingly the availability of clean, contiguous and well-located land at prices that still allow developers to offer a viable end product. “The next phase of growth will depend on disciplined land acquisition, infrastructure delivery and realistic pricing,” he said.

Mayank Saksena, MD and CEO, Land Services at ANAROCK Group, said approval and regulatory expenses account for a significant share of project economics, often adding a mid-single-digit to low-teens percentage to overall development costs. The burden increases further when delays, holding costs, and compliance-related friction are factored in. “Land attracts the most attention, but permission delays, conversion charges, stamp duty, registration fees, and compliance procedures all add up,” Saksena said. Combined, these costs can significantly increase the final ticket size paid by homebuyers.

As comparisons with overseas markets gain traction online, Saksena said affordability perceptions are often shaped by differences in mortgage structures, currency movements and product availability. “In cities such as London and Dubai, homes can appear more affordable because of these factors,” he said.

In Bengaluru, however, affordability is being squeezed by a combination of high land costs, statutory levies, slow approvals, financing expenses and limited supply in well-connected locations.

Developers agree that faster approvals could ease some of these pressures. Quicker clearances would reduce holding costs, improve project feasibility, and bring new supply to market faster. While that could help moderate price increases, industry players argue that meaningful improvements in affordability will require a broader combination of regulatory reforms, improved land availability and more efficient urban planning.

Published on June 2, 2026