Ahmedabad in Gujarat has topped the list as the most affordable city in India for housing this year, beating out major cities like Pune and Mumbai. According to a report by Knight Frank India, Ahmedabad leads the ranking based on the ratio of monthly home loan instalments to household income. Pune closely follows in second place, while Mumbai remains at the bottom due to its high property prices.
The report evaluated housing affordability across eight major cities in India, including Mumbai, Pune, Delhi, Kolkata, Bengaluru, Hyderabad, Chennai, and Ahmedabad. Ahmedabad emerged as the most affordable city with a ratio of 20 percent, making it the most budget-friendly housing market in the country. Pune secured the second spot with a ratio of 23 percent, while Kolkata ranked third at 24 percent.
On the other hand, Mumbai ranked last with a staggering ratio of 50 percent, reflecting the challenging affordability of homes in the city. Chennai claimed the fourth spot in affordability, while Bengaluru and Delhi tied for fifth place. Hyderabad came in sixth place.
The affordability of housing is measured by considering average property prices in a city, with monthly instalments calculated based on 80 percent of the home loan value over a 20-year tenure. Ideally, monthly home loan instalments should not exceed 40 percent of household income, with banks typically avoiding loans where this ratio exceeds 50 percent.
According to Shishir Baijal, Chairman and Managing Director of Knight Frank India, housing affordability is a key factor in sustaining demand for housing in the country and driving sales. He noted that while house prices are rising, housing remains affordable as incomes are also increasing, which is expected to strengthen in the coming year.
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