Homebuyer affordability steady in 6 of 8 Indian cities
New Delhi, July 3
Homebuyer affordability remained broadly supportive across India's residential markets during H1 2026, aided by cumulative monetary easing of 125 basis points, with Ahmedabad the most affordable among the top eight cities, a report said on Friday.
The report from Knight Frank India said six of the eight tracked cities remain within the 50 per cent affordability threshold, and Ahmedabad securing a ratio of 23 per cent, followed by Kolkata at 25 per cent and Pune at 28 per cent.
Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) continue to remain above the affordability threshold of 50 per cent.
Affordability worsened marginally in Bengaluru (35 per cent) and NCR (65 per cent) compared with 2025, while the remaining markets remained largely stable.
The index measures the proportion of household income spent on EMIs and showed that the cumulative benefit of lower borrowing costs is expected to continue supporting housing demand through H2 2026, the report added.
Affordability strengthened further during the pandemic as the Reserve Bank of India (RBI) lowered the policy repo rate to decadal lows. However, in response to elevated inflation, the RBI increased the repo rate by 250 basis points over a nine-month period beginning May 2022, which led to a deterioration in affordability during 2022.
Rate stability from early 2023 onward also helped stabilise affordability levels, but rising prices kept them elevated, particularly in the NCR.
The RBI recently delivered 125 basis points of cumulative easing ahead of the current pause, lending support to home loan affordability and helping residential sales sustain near the post-pandemic highs recorded in 2024.
Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India said that affordability gains have moderated mostly due to the rise in property prices.
"However, healthy employment, stable incomes and supportive financing conditions continue to underpin demand. Going forward, sustained income growth and balanced market fundamentals will be critical to maintaining housing affordability and supporting long-term market growth," he added.
— IANS
Reader Comments
Interesting data from Knight Frank. It's surprising that NCR at 65% is still considered "supportive" — that's basically two-thirds of income going to EMI. In Canada, banks would rarely approve that kind of ratio. Different market dynamics, I guess.
Ahmedabad at 23% — that's the real story! My cousins there bought a nice 2BHK last year and their EMI is lower than my rent in Bangalore. The price difference between cities is crazy. We need more balanced development across India.
I appreciate the report, but affordability is only half the equation. What about property prices that have risen 20-30% in the last 3 years in NCR? Even with lower interest rates, the absolute amount we need to borrow is huge. The dream home is still a dream for many of us.
As someone working in real estate analytics, I find this data very useful. The RBI's 125 basis points cut has definitely helped. But affordability ratios can be misleading — they don't account for other costs like maintenance, property tax, or the stress of a 20-30 year loan commitment.
Bengaluru at 35%! I'm a software engineer and even with a decent salary, buying a house here feels impossible. The report says "healthy employment" but salaries haven't kept up with property prices. Government needs to incentivize affordable housing more aggressively. 🏠
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