As property prices continue to surge across India, Chennai, Ahmedabad, and Kolkata stand out as the most affordable metros for residential investments, according to recent data. The rising cost of real estate has been a notable trend over the past decade, particularly exacerbated by the pandemic. However, despite the general increase in property prices, these three cities have managed to maintain relatively lower affordability ratios compared to other major urban centres.
The report highlights a significant increase in the property price to annual household income ratio (P/I ratio) in India, which has risen from 6.6 in 2020 to 7.5 in 2024. This figure surpasses the globally accepted benchmark of 5, indicating that the cost of property is becoming increasingly burdensome relative to income levels. The data underscores a growing disparity between rising property prices and stagnant household incomes.
Mumbai Metropolitan Area and Delhi are identified as the least affordable cities, with P/I ratios of 14.3 and 10.1, respectively. In contrast, Chennai, Kolkata, and Ahmedabad have emerged as the most affordable, with a P/I ratio of 5. This distinction is crucial for potential homebuyers and investors evaluating the cost-effectiveness of residential properties in various cities. The burden on homebuyers is further reflected in the EMI-to-monthly income ratio, which has escalated from 46% in 2020 to 61% in 2024. This increase highlights the growing financial strain on individuals seeking to purchase homes.
In metropolitan areas like Mumbai, New Delhi, Gurugram, and Hyderabad, the EMI-to-monthly income ratio has reached alarming levels, with Mumbai topping the list at 116% and New Delhi at 82%. Conversely, cities such as Ahmedabad, Chennai, and Kolkata offer comparatively more manageable ratios, ranging from 41% to 47%. This trend indicates that while major urban centres grapple with skyrocketing property costs, some cities are managing to keep real estate relatively accessible. For investors and potential homeowners, these insights offer valuable guidance in navigating the increasingly complex property market landscape.
