Top Cities for Housing Affordability in India 2024

The latest report from Magicbricks, “Housing Affordability in Major Indian Cities“, highlights the current landscape of housing affordability in India. The report reveals that the property price to annual household income ratio (P/I Ratio) has increased from 6.6 in 2020 to 7.5 in 2024, indicating a decrease in housing affordability nationwide.

Most Affordable Cities

• Chennai, Ahmedabad, and Kolkata: These cities are identified as the most affordable for residential investments, each with a P/I Ratio of 5. This suggests that the property prices in these cities are more in line with the average household income, making them attractive options for potential homebuyers.

Least Affordable Cities

• Mumbai Metropolitan Region (MMR) and Delhi: These regions are among the least affordable, with P/I Ratios of 14.3 and 10.1, respectively. This indicates a significant gap between property prices and household incomes, making homeownership more challenging in these areas.

Trends and Challenges

Magicbricks CEO Sudhir Pai observed that residential investments were most affordable during the latter half of 2021 and into 2022, driven by low interest rates and the recovery of household incomes. However, the demand for housing has since outpaced supply, leading to a rapid increase in residential prices and presenting new challenges for housing affordability in India.

EMI-to-Monthly Income Ratio

The report also highlights the growing burden of Equated Monthly Installments (EMIs) on homebuyers. The EMI-to-monthly income ratio has increased from 46% in 2020 to 61% in 2024. This trend is especially pronounced in the MMR (116%), New Delhi (82%), and other major cities, reflecting the financial strain on homeowners. Conversely, cities like Ahmedabad, Chennai, and Kolkata have lower EMI ratios of 41%, 41%, and 47%, respectively, indicating more favorable conditions for homebuyers.

Overall, the report underscores the widening gap between property prices and household incomes in India, highlighting the need for strategic interventions to improve housing affordability in India, especially in metropolitan regions.

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