Knight Frank Affordability Index H1 2025 says Mumbai properties get cheaper for 1st time, check how other cities performed

The Knight Frank Affordability Index H1 2025 shows Mumbai’s affordability at a record low of 48%, with median households spending nearly half their income on home loan EMIs.

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According to the Knight Frank India Affordability Index H1 2025 released on June 28, 2025, housing affordability has improved in the majority of India's major cities following the Reserve Bank of India's 100 basis point repo rate reduction since February 2025. The report, tracking the share of average household income required to pay for the EMI of an average home loan, plots stark disparities between cities such as Mumbai and others.

Mumbai: the costliest, but getting better

The report finds that Mumbai remains the costliest city in India, with an EMI-to-income ratio of 48%. This means that a median Indian household in Mumbai pays nearly half its income just to repay the EMI on a median house—a ratio which is deemed financially unsustainable by most lenders. Notably, this is the first time in history in the index that Mumbai dipped below 50%, a symbolic but nonetheless powerful threshold for buyers of homes. 

Ahmedabad, Pune, and Kolkata: leading the pack of affordability

On the other hand, Ahmedabad takes the lead in terms of being affordable with an index rating of 18%, closely followed by Pune at 22% and Kolkata at 23%. What this essentially means is that the household population of these cities spends a much lower proportion of their income on home loan EMIs, making homeownership considerably less expensive. The increased affordability largely reflects lower interest rates and relatively stable property prices.

NCR and other cities: Varying trends

The National Capital Region (NCR) saw a minor worsening in affordability, with the index worsening from 27% in 2023 to 28% in H1 2025 due to a sharp rise in residential prices. The other cities followed—Bengaluru, Hyderabad, and Chennai—also registered improvements, but no city approaches Ahmedabad or Pune's level of affordability.

Expert perspective

Shishir Baijal, Managing Director and Chairman of Knight Frank India, echoed in the report that, "Affordability is important in ensuring homebuyer demand and sales momentum, both of which are important contributors to the overall economy. With incomes rising and the economy strengthening, end-user financial confidence gets a boost, prompting them to take long-term commitments like homeownership."

The most recent figures from Knight Frank's Affordability Index highlight a continued gap: while Mumbai becomes more affordable, it is still an unaffordable dream for most, while Punjab remains a much more accessible route to homeownership. Punjab's property market could not contrast more, for value hunters and fiscally prudent buyers, with the prohibitive barriers in India's biggest metropolises.

 


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