Mumbai Most Expensive City To Live In, Delhi At Third Spot; Ahmedabad Most Affordable In India

Knight Frank India recently conducted a survey where Mumbai was regarded as the most expensive city to live in. The study by the company examined affordable housing and comprehensively took into account the financial pressure that the residents of Mumbai face.

The study suggests high home loan rates have severely impacted the affordability of residential properties across eight major cities in India. As per the survey, Ahmedabad remains the most affordable city followed by Pune and Kolkata.

The study says Ahmedabad had the most affordable residential properties with an EMI-to-income ratio, which stands at 23 per cent. The exact ratio in the case of Mumbai, which is regarded as the most unaffordable, comes out to be 55 per cent.

The real estate consultant released its ‘Affordability Index’ for the top eight cities, which include Mumbai, Delhi-NCR, Bengaluru, Chennai, Kolkata, Pune, Ahmedabad and Hyderabad, for the first half of the 2023 calendar year.

In the streak, the second most expensive city in the country was found to be Hyderabad, with an EMI-to-income ratio of 31 per cent. While Delhi NCR at a 30 per cent ratio holds the third spot, Tamil Nadu’s Chennai stands fourth with an EMI-to-income ratio of 28 per cent. Pune grabbed fifth place in Maharashtra with a ratio of 26 per cent.

Over the past year, the Reserve Bank of India (RBI) has increased its key lending rate by 250 basis points. Subsequently, the EMI-to-income ratios have also risen by 1-2 per cent in the cities.

The affordability Index indicates the proportion of income that a household requires to fund the EMI of a housing unit in a particular city. So, a Knight Frank Affordability index level of 40 per cent for a city implies that on average, households in that city need to spend 40 per cent of their income to fund the EMI of housing loan for that unit.

An EMI-to-Income ratio of over 50 per cent is considered unaffordable as beyond it banks rarely underwrite a mortgage, the consultant said.