Dream Home in Mumbai: A 109-Year Saving Goal
In India's bustling cities, even the top earners face a daunting task of saving for decades to afford a standard home. Mumbai, in particular, stands out as the least affordable city, with a 110 square metre home costing Rs 3.54 crore.
Real EstateHousing AffordabilityMumbaiGurugramHome LoansReal EstateJun 24, 2025
NHB’s Residential Property Price Index (RPPI) tracks the cost of a 110 square metre (1,184 square foot) house in various cities. NSSO’s Household Consumption Expenditure Survey (HCES) 2022-23 provides income data for urban households, including the richest 5 per cent. Assuming a 30.7 per cent savings rate, as reported in ‘India Gross Savings Rate’, a report by CEIC Data, Business Standard calculated how long it takes to afford a home.
Here’s what the data shows for key cities:
City | House Price (in lakh) | Annual Savings (in lakh) | Years to Buy
---- | --------------------- | ------------------------ | ------------
Mumbai | 354 | 10.7 | 109
Gurugram | 226 | 11.7 | 64
Bhubaneswar | 120 | 2.3 | 53
Patna | 81 | 6 | 45
Kolkata | 97 | 8.2 | 39
Ahmedabad | 94 | 8.1 | 38
Chennai | 113 | 10.2 | 37
Bengaluru | 115 | 10.4 | 36
Delhi | 135 | 12.7 | 35
Lucknow | 79 | 7.9 | 33
Dehradun | 70 | 9.4 | 30
Ranchi | 68 | 7.7 | 29
Guwahati | 73 | 8.3 | 27
Thiruvananthapuram | 87 | 10.9 | 26
Bhopal | 57 | 7.2 | 26
Vizag | 67 | 8.7 | 26
Raipur | 50 | 6.5 | 25
Hyderabad | 89 | 12.5 | 23
Ludhiana | 55 | 7.9 | 23
Jaipur | 45 | 9.3 | 16
Chandigarh | 78 | 17.4 | 15
Mumbai is the least affordable city, requiring 109 years of savings for a Rs 3.54 crore home, even for those earning Rs 10.7 lakh annually. Gurugram follows, with a Rs 2.26 crore home requiring 64 years at Rs 11.7 lakh savings per year. Chandigarh is relatively affordable: a home costing Rs 78 lakh will take 15 years to buy if one has Rs 17.4 lakh in annual savings.
Housing demand in Mumbai outstrips supply. A 110 square metre home, which will be a modest 2BHK apartment, costs Rs 3.54 crore. Even the top 5 per cent, those with an estimated monthly per capita expenditure of Rs 22,352 (according to NSSO data), will struggle. Gurugram, a corporate hub near Delhi, is growing rapidly and the same-sized home costs Rs 2.26 crore. These cities highlight a broader trend: job-rich urban centers are pricing out even high earners.
For middle class families, owning a home in Mumbai or Gurugram is difficult. Young professionals starting their careers face an even steeper climb. Planning to buy a home reshapes personal finance in several ways. Many may need to settle for smaller homes or live on rent for long. Taking a home loan means high interest rates and long tenures increase financial strain. The NHB notes that housing loans reached Rs 33.53 trillion by September 2024, up 14 per cent year-on-year.
More affordable cities like Chandigarh, Jaipur (16 years to repay a loan), or Hyderabad (23 years) may attract talent, but job opportunities often tie people to expensive hubs. This situation also affects long-term goals. Saving for a home can crowd out other priorities like retirement or education, forcing families to rethink their budgets.
The affordability gap isn’t just a personal finance issue; it’s a societal one. High prices in cities like Mumbai and Gurugram could slow urban economic growth, as workers struggle to settle. The NHB report highlights regional disparities in housing finance: southern states (35 per cent) and western states (30 per cent) dominate loan distribution, while north-eastern states get just 0.68 per cent. This uneven access worsens the crisis in high-cost areas.
Government schemes like Pradhan Mantri Awas Yojana (PMAY) aim to boost affordable housing, but their impact in premium cities is limited. The NHB’s RESIDEX index shows a 6.8 per cent price rise in Q3 2024, suggesting costs will keep climbing without major policy shifts.
For individuals, navigating this crisis requires smart planning. Start saving early, even if it’s a small amount. Explore suburbs or tier-2 cities where prices are lower. If loans are unavoidable, compare rates and opt for shorter tenures to minimize interest. Government subsidies under PMAY can help, especially for first-time buyers.
Frequently Asked Questions
What is the average cost of a 110 square metre home in Mumbai?
The average cost of a 110 square metre home in Mumbai is Rs 3.54 crore.
How long does it take for the top 5 per cent earners in Mumbai to afford a home?
It takes 109 years for the top 5 per cent earners in Mumbai to afford a home, assuming a 30.7 per cent savings rate.
What is the main reason for the high cost of homes in Mumbai and Gurugram?
The main reason for the high cost of homes in Mumbai and Gurugram is the high demand for housing in these job-rich urban centers, which outstrips the supply.
What are some government schemes to boost affordable housing in India?
The Pradhan Mantri Awas Yojana (PMAY) is a key government scheme aimed at boosting affordable housing in India.
What are some tips for individuals to navigate the housing affordability crisis?
Some tips include starting to save early, exploring suburbs or tier-2 cities with lower prices, comparing loan rates, and considering government subsidies like PMAY.
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