Buying a home in Mumbai is still out of reach for most people, despite the city hitting best affordability levels in last 15 years, says a report by Knight Frank. The report however also says that on an average, a household in Mumbai now spends 48% of its income on monthly home loan payments. That’s a slight improvement from 50% last year, but still much higher than in other major Indian cities.
In comparison, people in the National Capital Region (NCR, which includes Delhi and its suburbs) and Bengaluru spend less than 30% of their income on EMIs, while in Ahmedabad, it’s only 18%. This makes Mumbai the most expensive housing market among India’s top eight cities, according to Knight Frank’s affordability index for the first half of 2025.
The change comes after the Reserve Bank of India cut interest rates by 100 basis points this year. Lower rates make home loans cheaper and are expected to boost housing demand in India.
Knight Frank said affordability is now at its best since the pandemic and much better than at the end of 2024, just before the first rate cut in February 2025.
“Affordability levels are now at their best since the pandemic and are significantly better than the levels seen at the end of 2024, just before the first rate cut announced in February 2025,” as per the report.
Still, there are challenges. Incomes have barely grown due to the slowing economy, while property prices have continued to rise. As a result, home sales in key markets are starting to slow down after booming for two years. Real estate firm ANAROCK reported a 28% drop in home sales across India’s top seven cities from January to March 2025, compared to the same period last year.