Affordable Housing in Delhi Is Quietly Minting Returns: What the Numbers Actually Show

The yield gap has flipped. Affordable housing units in Delhi's peripheral corridors—priced between INR 18 lakh and INR 45 lakh under the Pradhan Mantri Awas Yojana–Urban (PMAY-U) scheme—are generating gross rental yields of 6 to 8 percent, according to transaction data compiled by PropEquity for the first half of 2026. Comparable two-bedroom apartments in Greater Kailash or Vasant Kunj are yielding 3.2 to 4.1 percent at current ask prices above INR 1.8 crore. The arithmetic, for once, favours the cheaper end of the market.

This matters right now because PMAY-U's December 2024 extended deadline pushed a fresh tranche of completed inventory into the resale market through early 2026. Nearly 1.1 lakh units sanctioned across Delhi and the NCR under the scheme have reached possession stage, according to the Delhi Development Authority's project tracker updated in May. That supply has not cratered prices the way sceptics predicted. Instead, rental demand from gig-economy workers, nursing staff at private hospitals along NH-48, and migrant employees at Okhla's industrial estates has absorbed the stock faster than comparable mid-segment launches in Dwarka Sub-City.

Where the Returns Are Coming From

Rohini Sector 28 and Narela's PMAY clusters are the two most-cited locations in broker transaction logs this quarter. A 450-square-foot unit in Narela that changed hands at INR 22 lakh in January 2026 is now fetching INR 12,000 per month in rent—a gross yield of 6.5 percent before society maintenance charges. In Rohini Sector 28, slightly larger units at INR 35 lakh are renting for INR 18,000 to INR 20,000 a month, pushing yields toward 6.8 percent. By comparison, a DLF Capital Greens apartment in Moti Nagar—average ticket size roughly INR 2.1 crore—is renting for INR 60,000 to INR 65,000 a month, a yield of about 3.6 percent.

The DDA's Light House Project at Jhilmil in East Delhi adds another data point. Pilot units of 34 square metres, constructed using monolithic concrete technology and handed over in phases from late 2023, have seen resale premiums of 11 to 14 percent above allotment price within 24 months of possession—faster capital appreciation than most analysts assigned to the segment. Investors who picked up two or three units through the 2022 DDA Housing Scheme draw are sitting on both a capital gain and a rental income stream.

The Risks Investors Are Underpricing

None of this is a free lunch. Vacancy risk in Narela specifically runs higher than the headline yield implies—broker estimates put effective occupancy at 78 to 82 percent across the cluster, which trims the realised yield closer to 5.2 percent. Resale liquidity is also thinner; a premium flat in Saket can trade in 45 days while some PMAY units in outlying sectors have sat listed for four to five months without closing. Financing is a constraint too: most institutional lenders still apply a haircut on loan-to-value for sub-50-lakh affordable units, forcing buyers to bring more equity upfront.

The Delhi Metro Rail Corporation's Phase IV corridors—particularly the Janakpuri West to RK Ashram stretch and the Aerocity to Tughlakabad line, both expected to reach partial commercial operation by late 2027—are the variable that could sharpen or reshape these yield calculations significantly. Affordable stock within 800 metres of confirmed Phase IV stations in Vikaspuri and Khanpur has already seen a 4 to 7 percent asking-price uptick since route alignments were confirmed in the 2025–26 Union Budget. If ridership ramps the way Phase III did along the Magenta Line, the yield compression could accelerate as capital values catch up to rental growth.

For investors prepared to run a 5-to-7-year hold and manage tenancy themselves or through a local broker on a 7–8 percent management fee, the numbers are hard to dismiss. The entry ticket is low, the tenant pool is structurally large, and government policy—whatever its gaps in delivery—continues to underwrite demand. That combination does not guarantee a windfall, but it does explain why a segment once considered the preserve of social policy is now showing up on spreadsheets that were previously reserved for South Delhi penthouses.