NEW DELHI: Amid the boom in real estate demand and rising prices, Chennai, Ahmedabad and Kolkata have emerged as the most affordable metros for residential investments. Mumbai Metropolitan Region and Delhi are the least affordable, according to a Magicbricks report. While household incomes across the top 10 cities have increased at a compounded annual growth rate (CAGR) of 5.4% between 2020 and 2024, property prices have surged 9.3% (CAGR) in this period, which has weakened affordability.
Property price to annual household income ratio (P/I Ratio) in India has increased from 6.6 in 2020 to 7.5 in 2024, higher than the globally accepted benchmarks of 5, the report said.The Mumbai Metropolitan Region (14.3) and Delhi (10.1) emerged as the least affordable, while Chennai, Kolkata and Ahmedabad (5) are among the most affordable cities for residential investments in 2024.
Not surprisingly, higher prices have meant greater EMI burden on home buyers. 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 and reflecting affordability concerns nationwide, especially metros. The trend is more pronounced in MMR (116%), New Delhi (82%), Gurugram (61%) and Hyderabad (61%). In contrast, cities like Ahmedabad (41%), Chennai (41%) and Kolkata (47%) are relatively more affordable.
The report says 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 indicates the proportion of property price to annual household income. If a city’s affordability is 3.7, the average property price in the city is 3.7 times the average annual household income.
Property price to annual household income ratio (P/I Ratio) in India has increased from 6.6 in 2020 to 7.5 in 2024, higher than the globally accepted benchmarks of 5, the report said.The Mumbai Metropolitan Region (14.3) and Delhi (10.1) emerged as the least affordable, while Chennai, Kolkata and Ahmedabad (5) are among the most affordable cities for residential investments in 2024.
Not surprisingly, higher prices have meant greater EMI burden on home buyers. 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 and reflecting affordability concerns nationwide, especially metros. The trend is more pronounced in MMR (116%), New Delhi (82%), Gurugram (61%) and Hyderabad (61%). In contrast, cities like Ahmedabad (41%), Chennai (41%) and Kolkata (47%) are relatively more affordable.
The report says 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 indicates the proportion of property price to annual household income. If a city’s affordability is 3.7, the average property price in the city is 3.7 times the average annual household income.
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