In a revealing analysis of housing affordability across major Indian cities, Chennai, Ahmedabad, and Kolkata have been identified as the most budget-friendly locations for property investments. Conversely, Mumbai Metropolitan Region (MMR) and Delhi have emerged as the least affordable cities in the country, according to a recent report by proptech firm Magicbricks. The report, titled Housing Affordability in Major Indian Cities, highlights a significant shift in housing affordability over the past few years. The property price to annual household income ratio (P/I Ratio) has escalated from 6.6 in 2020 to 7.5 in 2024, indicating a growing disparity between income levels and property prices.
Chennai, Ahmedabad, and Kolkata lead the affordability index, each with a P/I Ratio of 5, making them attractive for residential investments in 2024. In stark contrast, Mumbai Metropolitan Region registers a high P/I Ratio of 14.3, and Delhi stands at 10.1, reflecting the escalating costs of home ownership in these major metropolitan areas. The report underscores that while the latter half of 2021 through 2022 was characterised by relatively affordable residential investments—driven by low interest rates, recovering household incomes, and modest price increases—the market has since shifted. The demand for homeownership has surged, outstripping supply and driving up residential prices significantly.
Additionally, the analysis reveals a rise in the EMI-to-monthly income ratio from 46% in 2020 to 61% in 2024. This increase points to a growing financial burden on home buyers nationwide, particularly in metropolitan areas like MMR (116%), New Delhi (82%), Gurugram (61%), and Hyderabad (61%). Conversely, Ahmedabad, Chennai, and Kolkata have comparatively lower EMI-to-income ratios of 41%, 41%, and 47%, respectively, highlighting their relative affordability. These trends underscore the challenges facing prospective homeowners in high-cost cities and highlight the investment potential in more affordable markets.
