Unaffordable Cities: Delhi and Mumbai Top the List for Residential Properties
Chennai, Ahmedabad, and Kolkata are the most affordable metros for residential investments, while Delhi and Mumbai are the least affordable.
Residential PropertyAffordable HousingReal EstateIndiaDelhiMumbaiReal Estate MumbaiSep 04, 2024
On the other hand, the Mumbai Metropolitan Region and Delhi are the least affordable cities for residential properties. The report found that the property price to annual household income ratio (P/I Ratio) in India has increased from 6.6 in 2020 to 7.5 in 2024, which is higher than the globally accepted benchmarks of 5.
The Mumbai Metropolitan Region has a P/I Ratio of 14.3, making it the least affordable city in the country. Delhi is not far behind, with a P/I Ratio of 10.1. In contrast, Chennai, Kolkata, and Ahmedabad have a P/I Ratio of 5, making them the most affordable cities for residential investments.
The rising property prices have also led to a greater EMI burden on home buyers. The EMI-to-monthly income ratio in India has risen from 46% in 2020 to 61% in 2024. This indicates a rising burden on home buyers and reflects affordability concerns nationwide, especially in metros.
Cities like Ahmedabad, Chennai, and Kolkata are relatively more affordable, with EMI-to-monthly income ratios of 41%, 41%, and 47%, respectively. The report suggests that the current situation is likely to hit equilibrium conditions, with market trends indicating a deceleration in price growth due to an anticipated increase in residential supply.
Affordability is an important factor to consider when investing in residential properties. It indicates the proportion of property price to annual household income. For example, if a city's affordability is 3.7, the average property price in the city is 3.7 times the average annual household income.
The report highlights the need for affordable housing options in cities like Delhi and Mumbai. With the rising property prices and increasing EMI burden, it is becoming increasingly difficult for people to own homes in these cities. The government and developers need to work together to create more affordable housing options and make homeownership a reality for more people.
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Frequently Asked Questions
What is the most affordable city for residential investments in India?
According to the report, Chennai, Ahmedabad, and Kolkata are the most affordable cities for residential investments.
What is the least affordable city for residential properties in India?
The Mumbai Metropolitan Region is the least affordable city for residential properties, followed closely by Delhi.
What is the property price to annual household income ratio (P/I Ratio) in India?
The P/I Ratio in India has increased from 6.6 in 2020 to 7.5 in 2024, which is higher than the globally accepted benchmarks of 5.
How has the EMI burden on home buyers changed in recent years?
The EMI-to-monthly income ratio in India has risen from 46% in 2020 to 61% in 2024, indicating a rising burden on home buyers.
What is the expected trend in property prices in the coming years?
The report suggests that the current situation is likely to hit equilibrium conditions, with market trends indicating a deceleration in price growth due to an anticipated increase in residential supply.
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