Mumbai's Housing Market: High-Income Earners Need 109 Years to Afford a Home

Mumbai’s housing affordability has seen a marked improvement, reaching its highest level in the past 15 years, according to a report by Knight Frank. However, home ownership remains a distant dream for most residents, including high-income earners. The National Housing Bank’s report reveals that the top 5% of Mumbai’s urban households would need to save for 109 years to afford an average-priced home, highlighting the severe affordability crisis in the city.

According to a separate report by Knight Frank India, the average Mumbai household now spends 48% of its monthly income on home loan payments, a slight improvement from 50% last year. For the first time in the history of Knight Frank’s affordability index, Mumbai has dropped below the 50% mark, which is considered the outer limit for affordability. Falling home loan interest rates have contributed to this improvement, but experts emphasize that the situation is still far from truly affordable.

The government defines affordable housing as a home that costs less than INR 45 lakh, with a carpet area of up to 60 square meters in metro areas and 90 square meters in non-metro areas. These guidelines were introduced in 2017. However, real estate body CREDAI has called for the INR 45 lakh cap to be raised to INR 75–80 lakh. They have also suggested a 1% GST on under-construction homes in this higher price range.

Finding a home within the INR 45 lakh budget in Mumbai is a significant challenge. Property prices in the city range from INR 20,000 to INR 3 lakh per square foot. For many buyers, owning a house in Mumbai remains just a dream. For around INR 50 lakh, a buyer can get a 1 BHK flat in areas like Mira Road, Vasai, Virar, Thane, Kalyan, Dombivli, and Panvel, which are part of the Mumbai Metropolitan Region but lie outside the city’s limits.

Knight Frank’s analysis of Maharashtra’s property registration data shows that about 80% of homes sold in Mumbai each year are priced under INR 2 crore. In the first 11 months of 2023, 114,000 properties were registered in Mumbai. Of these, over 94,000 homes, or about 82%, were priced up to INR 2 crore. Over 12% were in the INR 2 crore to INR 5 crore range, and about 4% were priced above INR 5 crore.

In 2024, 1.28 lakh properties were registered in Mumbai, a 12% rise compared to the previous year. Of these, about 1.01 lakh, or 78%, were priced up to INR 2 crore. Over 15% fell in the INR 2 crore to INR 5 crore range, and the remaining 5% were priced above INR 5 crore. Despite the improvements, the housing market in Mumbai continues to pose significant challenges for potential buyers, especially those in the high-income bracket.