Knight Frank India revealed its ‘Affordability Index’ on Tuesday. This report measures home loan EMI costs against household income. The index shows how much income a family needs for a home loan payment in a city.
Mumbai, usually the priciest real estate market, is now more accessible. This change follows the RBI’s decision to lower the repo rate. Home loan rates have dropped due to these cuts since February.
An EMI/income ratio above 50% means a market is unaffordable. Banks are hesitant to approve mortgages past this point.
Ahmedabad is the most affordable city. Its ratio is 18%, with Pune at 22% and Kolkata at 23%. Mumbai remains the least affordable at 48%.
Homebuyer affordability improved in most cities this year. This is due to the RBI’s repo rate reductions.
Mumbai’s affordability index improved by over 2%. It went from 50% in 2024 to 48% in early 2025.
This is the first time Mumbai’s index has dropped below 50%. This percentage was previously seen as the affordability limit.
Mumbai’s property market is now more affordable. Lower home loan rates are the reason for this shift.
The index stayed the same in Bengaluru and Hyderabad. Their ratios were 27% and 30% respectively.
Chennai saw a slight improvement. Its affordability index reached 24% in early 2025 from 25% last year.
Delhi-NCR became slightly less affordable. Its index rose to 28% in early 2025 from 27% last year.
The RBI’s rate cuts help reduce EMI burdens. This should boost home sales and encourage buyers to invest. Lower rates offer relief from recent price increases. Buyers can expect lower EMI costs and higher savings.