NEW DELHI– Housing affordability improved sharply across India’s major cities in 2025, with Ahmedabad emerging as the most affordable market among the top eight cities, according to a report released on Tuesday.
The report by property consultancy Knight Frank India showed Ahmedabad topping the Affordability Index with an EMI-to-income ratio of 18 per cent. Pune and Kolkata followed, each with a ratio of 22 per cent, indicating relatively lower financial stress for homebuyers.
Mumbai also recorded a notable improvement. The city’s EMI-to-income ratio fell to 47 per cent, marking the first time housing affordability in India’s most expensive property market has dropped below the 50 per cent threshold, a level widely considered sustainable.
The consultancy attributed the improvement in affordability to a cumulative 125 basis-point cut in the policy repo rate since February 2025, along with steady economic growth, easing inflation, and rising household incomes.
In Mumbai, a stable business environment, consistent income growth, moderate price increases, and easier access to financing were cited as key drivers behind improved affordability.
The National Capital Region was the only major housing market to see a deterioration in affordability during the year. The report said this was largely due to a sharp rise in weighted average property prices, driven by increased demand in the premium housing segment.
Affordability across India strengthened during the pandemic as the Reserve Bank of India reduced policy rates to decade lows, the report noted. That supportive rate environment has helped residential sales remain close to the post-pandemic peak recorded in 2024.
The consultancy said the favorable interest rate backdrop is likely to continue into 2026, supported by India’s sustained and stable economic growth.
“Supportive affordability is essential for sustaining homebuyer demand and sales momentum, which in turn acts as a key economic driver for the country,” said Shishir Baijal, chairman and managing director of Knight Frank India.
He added that over the past few years, rising incomes, reasonable price growth, and declining interest rates have worked together to strengthen overall housing affordability across major markets. (Source: IANS)
