The Indian real estate landscape has been a rollercoaster of affordability and luxury, with property prices constantly evolving. Knight Frank India’s Property Affordability Index 2023 has unveiled some intriguing insights into the affordability of housing across major Indian cities. As the Reserve Bank of India’s repo rate hikes impact interest rates and subsequently, EMI payments, we delve into the most affordable and expensive cities to buy houses in India.
Affordable havens: Ahmedabad, Pune, and Kolkata
Amidst rising interest rates, some cities remain a beacon of affordability. Ahmedabad, Pune, and Kolkata have emerged as the most affordable housing markets in the country, with average EMI payments accounting for 23-26% of monthly household incomes. Families in Ahmedabad are leading the affordability front, dedicating just 23% of their monthly income to house loan EMIs. Pune and Kolkata follow closely with a 26% EMI-to-income ratio. These cities not only provide a relatively comfortable EMI load but also offer a promising quality of life.
Balancing act: Chennai and Bengaluru
State capitals Chennai and Bengaluru find themselves in a slightly higher affordability bracket with an EMI-to-income ratio of 28%. Despite this, they continue to attract homebuyers with their booming IT sectors, cultural vibrancy, and well-rounded urban amenities. While not as pocket-friendly as some of their counterparts, these cities strike a balance between affordability and urban allure.
The capital conundrum: Delhi-NCR and Hyderabad
Moving up the affordability scale, the Delhi-NCR region and Hyderabad display an EMI-to-income ratio of 30% and 31% respectively. While the Delhi-NCR area encompasses Gurgaon and Noida, homebuyers here are spending just under a third of their income on home loan EMIs. Hyderabad, with its emerging IT hub and rich history, offers homes at a slightly higher EMI-to-income ratio, but the demand remains consistent.
The pricey pinnacle: Mumbai’s still the king
In the world of Indian real estate, Mumbai remains the crowning jewel of luxury living – and the most expensive. Although the city’s EMI-to-income ratio has improved significantly from a staggering 93% in 2010 to 55% in 2023, it still takes a significant chunk of a resident’s monthly income. Mumbai’s allure lies in its opulent lifestyle, bustling urban charm, and iconic landmarks, making it a dream destination for many despite its cost.
The dynamics of the Indian real estate market are in constant flux, influenced by economic trends, policy changes, and regional development. Knight Frank India’s Property Affordability Index 2023 underscores the delicate balance between affordability and luxury that different cities offer. From the affordable havens of Ahmedabad, Pune, and Kolkata to the thriving metros of Chennai and Bengaluru, and the capital conundrums of Delhi-NCR and Hyderabad, each city presents a unique narrative of housing affordability.
While Mumbai continues to reign as the city of dreams with its unparalleled charm, it also highlights the challenges of achieving a truly affordable housing market. The housing sector’s resilience in the face of interest rate hikes reflects the unwavering demand for homes, whether it’s a modest dwelling or a luxury abode.
