The latest Affordability Index report by Knight Frank India reveals the most affordable and expensive cities for home buyers in India. Ahmedabad is the most affordable housing market with an EMI-to-income ratio of 21%. Pune and Kolkata are close behind with a ratio of 24%. On the other hand, Mumbai remains the most expensive market with a ratio of 51%, followed by Hyderabad with a ratio of 30%. Despite this, home prices in Hyderabad increased by 11% in 2023.
The National Capital Region (NCR) saw an improvement in affordability, with a ratio of 27% in 2023 compared to 29% in 2022. Bengaluru is the fourth most expensive market with a ratio of 26% in 2023, showing a slight improvement since 2022 and a 6% enhancement from pre-pandemic levels in 2019. Overall, there has been an improvement in home affordability across cities compared to 2019. It is projected that inflation moderation and potential interest rate decreases in 2024 might further enhance home affordability.
Furthermore, the Equated Monthly Installment-to-income ratio for households has shown improvement in 2023, indicating a positive trend in housing affordability.
