The affordability of housing in India’s major property markets has risen, thanks to a consistent rise in income levels and improved macro-economic indicators. Despite higher mortgage rates in the past year, the affordability level, which is the income proportion needed to cover monthly instalments for an apartment, has witnessed a positive trend, according to a study by Knight Frank India. 

According to the company’s Affordability Index, Ahmedabad has emerged as the most affordable housing market in India with buyers only needing to spend 23% of their household income to service a mortgage. 

Pune and Kolkata (Calcutta) followed with 24% each in 2023. The ratio level of Kolkata has improved by 1% from 2022 and by 8% from the pre-pandemic year of 2019. The affordability ratio of Chennai has improved by 2% from 27% in 2022 to 25% in 2023. It secured fourth place in the Affordability Index.

Despite higher home loan interest rates in the last year, the affordability ratio showed a positive trend overall in 2023 due to rapidly rising incomes across India.