Mumbai's Housing Market: Affordability at 15-Year High, Yet Out of Reach for Most Buyers
While Mumbai's housing affordability has reached a 15-year high, the majority of potential buyers still find homeownership out of reach. High-income earners face significant challenges, with the top 5% of urban households requiring over 109 years of savings to purchase an average home.
Mumbai Real EstateHousing AffordabilityProperty PricesHome LoansAffordable HousingReal Estate MumbaiJun 30, 2025
A recent Knight Frank India report underscores this paradox. It notes that the average Mumbai household now spends 48% of its income on monthly home loan repayments, a slight improvement from 50% last year but still significantly higher than in other major Indian metros. This is the first time in the index's history that Mumbai has fallen below the 50% mark, which is considered the outer point of affordability. The report attributes this improvement to reduced home loan rates, but experts agree that true affordability is still far off.
The definition of affordable housing in India, as per government standards set in 2017, includes residential units with a carpet area of 60 square metres in metros and 90 square metres in non-metros, with a value below ₹45 lakh. Real estate body CREDAI has been advocating for an increase in the cap on affordable housing from ₹45 lakh to ₹75-80 lakh. They also suggest that 1% GST be charged on under-construction housing units priced in the range of ₹75 to ₹80 lakh. Shekhar Patel, CREDAI President, stated, “The supply of affordable housing has not decreased. Units of 60 sq meters and 90 sq meters are still constructed, but their prices have gone beyond the cap. CREDAI will run a campaign to redefine this cap, which will ease the burden on customers.”
Mumbai's real estate market is the most expensive in the country, with apartments ranging from ₹20,000 per sq ft to ₹3 lakh per sq ft. For a budget of ₹50 lakh, a 1 BHK apartment can be purchased in areas like Mira Road, Vasai, Virar, Thane, Kalyan, Dombivali, and Panvel. These areas are part of the Mumbai Metropolitan Region (MMR) but do not fall within the city limits of Mumbai. Piyush Doshi, a real estate consultant based in Mumbai’s western suburbs, noted, “Homebuyers can still find compact 2BHK options in areas like Titwala, Ambernath, Karjat, and Neral. However, within Mumbai city limits, ₹50 lakh would barely fetch a 1RK (Room-Kitchen) studio apartment in the suburbs, and even those are increasingly hard to come by.”
According to the property registration data of the Maharashtra government, nearly 80% of the properties registered annually in Mumbai are in the up to ₹2 crore price range. In the first 11 months of 2023, the city registered 1.14 lakh properties, with over 94,000, or over 82%, in the up to ₹2 crore price range. In 2024, 1.28 lakh properties were registered, a 12% increase from 2023. Out of these, 1.01 lakh, or 78%, were in the up to ₹2 crore price range, followed by over 15% in the ₹2 crore to ₹5 crore range and the balance over 5% in the above ₹5 crore range.
When considering a home loan, experts advise caution. For a family with a monthly income of ₹3 lakh, purchasing an apartment in the range of ₹1 crore to ₹1.25 crore is recommended if the purchase is heavily dependent on a home loan. Viraj Modia, a chartered accountant based in Mumbai, explained, “If we consider ₹3 lakh as the monthly family income, wherein both the husband and wife earn ₹1.50 lakh each monthly, and they purchase a ₹2 crore apartment on a 100% home loan, their monthly EMI will be around ₹1.75 lakh. This is more than 50% of the family's monthly income and not advisable. The couple should rather take a home loan not more than ₹1.25 crore, which will keep their monthly home loan EMI around ₹1 lakh, and leave a buffer for investments, savings, and monthly expenses.”
Despite the improved affordability, the road to homeownership in Mumbai remains challenging. The city's real estate market continues to be one of the most expensive in the country, and while the government and real estate bodies are working to redefine affordable housing, the journey to making homeownership a reality for the majority is far from over.
Frequently Asked Questions
What is the current definition of affordable housing in India?
As per government standards set in 2017, a residential unit with a carpet area of 60 square metres in metros and 90 square metres in non-metros and a value below ₹45 lakh falls under the category of 'affordable housing'.
Why is homeownership still out of reach for most buyers in Mumbai?
Despite improved affordability, high property prices and high monthly home loan repayments make it challenging for most buyers, even those with high incomes. The top 5% of urban households would need over 109 years of savings to purchase an average home in Mumbai.
What are the proposed changes to the affordable housing cap?
Real estate body CREDAI has been advocating for an increase in the cap on affordable housing from ₹45 lakh to ₹75-80 lakh and suggests that 1% GST be charged on under-construction housing units priced in this range.
What can a ₹50 lakh budget get you in Mumbai's real estate market?
With a ₹50 lakh budget, a 1 BHK apartment can be purchased in areas like Mira Road, Vasai, Virar, Thane, Kalyan, Dombivali, and Panvel. Within Mumbai city limits, this budget would barely fetch a 1RK (Room-Kitchen) studio apartment in the suburbs.
Is it advisable for a family with a monthly income of ₹3 lakh to take a ₹2 crore home loan?
Experts advise that a family with a monthly income of ₹3 lakh should purchase an apartment in the range of ₹1 crore to ₹1.25 crore if the purchase is heavily dependent on a home loan. A ₹2 crore home loan would result in a monthly EMI of around ₹1.75 lakh, which is more than 50% of the family's monthly income and not advisable.
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