Mumbai's property paradox: Most affordable in 15-years, yet too high

For the first time since Knight Frank began tracking housing affordability, Mumbai has dropped below the 50% EMI-to-income threshold — a benchmark banks consider while underwriting home loans. At 48%, this may seem like a win, but let's not forget what it really means: Mumbaikars are still spending nearly half of their monthly income on loan repayments. That's not affordable by global standards.

RBI's Role in the Affordability Shift

This transformation didn’t happen in isolation. The Reserve Bank of India’s bold move to cut repo rates by 100 basis points in 2025, along with liquidity boosts through CRR cuts, made borrowing cheaper. Home loan rates are now expected to hover around 8%, down from 8.5%, offering some relief. But with Mumbai’s property prices still sky-high, this relief only stretches so far.

Ahmedabad Takes the Crown for Affordability

While Mumbai celebrates breaking a psychological barrier, Ahmedabad quietly claims the title of India’s most affordable city. Here, just 18% of household income goes towards EMIs. Pune and Kolkata follow with 22% and 23%, respectively. These cities are quickly becoming magnets for middle-class buyers priced out of metros.

A Bigger Picture of Uneven Growth

Contrast this with NCR, where affordability actually worsened—from 27% to 28%—due to skyrocketing property prices. Even Bengaluru and Chennai sit in the 24–30% range, showing that the Indian real estate market is anything but uniform.

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Still Out of Reach for Many

Despite improved affordability ratios, real estate transactions are down 28% year-on-year. Why? Because price tags are still rising—property values are inflating faster than salaries. Add to this the glut of luxury projects over affordable housing, and the dream of home ownership remains elusive for many.