Mumbai and Delhi have emerged as the least affordable cities for real estate investments, while Chennai, Ahmedabad, and Kolkata are among the most affordable, according to a new report by Magicbricks.
Reported by Money Control, the Housing Affordability in Major Indian Cities report, released by the proptech firm, assessed affordability based on the property price-to-annual household income ratio (P/I Ratio). It found that in 2024, Chennai, Ahmedabad, and Kolkata have a P/I ratio of 5, making them the most accessible for residential buyers. Meanwhile, the Mumbai Metropolitan Region (MMR) recorded a ratio of 14.3 and Delhi 10.1, indicating significant affordability challenges.
Magicbricks also reported that the EMI-to-monthly income ratio in India has increased from 46% in 2020 to 61% in 2024, signaling growing pressure on homebuyers nationwide, particularly in major metropolitan regions. This ratio highlights the rising burden of equated monthly installments (EMIs) on household incomes. The report found that in MMR, the EMI-to-income ratio is as high as 116%, while Delhi stands at 82%, followed by Gurugram and Hyderabad at 61%.
In contrast, cities like Ahmedabad (41%), Chennai (41%), and Kolkata (47%) continue to offer relatively affordable investment opportunities.
Magicbricks CEO Sudhir Pai emphasized that housing affordability was at its peak between the latter half of 2021 and 2022, as homebuyers benefited from low interest rates and steady household income growth.
“During this period, residential investments were at their most affordable. However, since then, demand has significantly outpaced supply, driving up prices and creating new challenges for affordable housing,” Pai said.
The report underscores how the rapid rise in real estate prices across India, particularly in major metro areas, has exacerbated affordability concerns, posing significant challenges for homebuyers looking for affordable options in 2024.