Home buying may be more affordable in 2024 across cities: Knight Frank India 

An expected moderation in inflation and a projected downward trend in interest rates should further improve home affordability in 2024, according to Knight Frank India’s affordability index.  

While Ahmedabad tops as the most affordable city, Mumbai remains the most expensive residential market in the country.   

Ahmedabad has an affordability ratio of 21 per cent, which implies that, on average, a household in Ahmedabad needs to spend 21 per cent of its household income to pay EMI for housing loans. Kolkata and Pune followed at 24 per cent each in 2023.   

In the case of Kolkata, the ratio improved by 1 per cent from 2022 and by 8 per cent from the pre-pandemic year of 2019. 

Expensive cities   

Mumbai is the only city beyond the affordability threshold of 50 per cent, a level exceeding which banks rarely underwrite a mortgage. The city, however, did see an improvement of 2 per cent in its affordability index — 51 per cent in 2023 from 53 per cent in 2022.   

Hyderabad is the second-most expensive residential market in the country. The affordability index of the city remained unchanged at 30 per cent for both 2023 and 2022, as home prices increased by 11 per cent in 2023.   

The National Capital Region (NCR) has seen its affordability index improve to 27 per cent in 2023 from 29 per cent in 2022.   

Bengaluru is the fourth-most expensive market, with an affordability index of 26 per cent in 2023. The ratio has improved marginally by 1 per cent since 2022 and by 6 per cent from the pre-pandemic year of 2019.  

The affordability index of Chennai has improved by 2 per cent, from 27 per cent in 2022 to 25 per cent in 2023.  

“Further, if the RBI decides to lower the repo rate later in 2024, as is widely expected, leading to a reduction in home loan interest rates, the affordability of homes in 2024 could see a noteworthy enhancement, providing a comprehensive boost to the sector,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India. 


The Knight Frank Affordability Index indicates the proportion of income that a household requires to fund the monthly instalment (EMI) of a housing unit in a particular city. The affordability index level of 40 per cent for a city implies that, on an average, households in that city need to spend 40 per cent of their income to fund the EMI of a housing loan for a unit. An EMI-income ratio of over 50 per cent is considered unaffordable as it is the limit beyond which banks rarely underwrite a mortgage. 

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