Home affordability improves across India property markets, Ahmedabad leads
- IBEF
- December 30, 2024
In 2024, a robust economy and stable interest rates improved home affordability in India’s key property markets. The increase in income levels has enabled more individuals and families to buy homes, making homeownership more accessible across the country. According to Knight Frank India’s analysis, homebuyers' affordability—measured by the Equated Monthly Instalment (EMI) to income ratio—has improved in seven out of eight cities, with Bengaluru being the only exception. Ahmedabad, Pune, and Kolkata are now the most affordable markets. Ahmedabad’s affordability ratio is 20%, followed by Pune at 22% and Kolkata at 24%.
While property prices have risen, the steady income growth has enabled individuals to maintain the financial confidence needed to invest in homes. Chairperson and Managing Director of Knight Frank India, Mr. Shishir Baijal, noted that affordability plays a crucial role in sustaining demand and driving sales, which supports economic growth. In Ahmedabad, the city’s affordable housing market has been supported by policy incentives, infrastructure development, and industrial growth, positioning it as a leading real estate destination. Meanwhile, despite being the most expensive market, Mumbai has seen an affordability improvement, with the affordability ratio improving by 17% since 2019. However, Bengaluru's affordability dropped slightly, with households now expected to allocate 27% of their income towards home purchases. Despite this, the residential market remains resilient, with housing demand growing by 23% annually since 2020. With stable interest rates and strong economic growth, affordability will continue supporting homebuyer demand in 2025.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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