The latest report from Magicbricks reveals a significant increase in the property price to annual household income ratio in India, rising from 6.6 in 2020 to 7.5 in 2024. The EMI-to-monthly income ratio has also surged, from 46 per cent in 2020 to 61 per cent in 2024, highlighting growing affordability concerns, particularly in metropolitan areas like the Mumbai Metropolitan Region and New Delhi. While cities like Chennai, Ahmedabad, and Kolkata remain more affordable, the rising costs present new challenges for homebuyers across the country.
According to a recently published Magicbricks report, Chennai, Ahmedabad, and Kolkata rank as some of the most budget-friendly cities for housing investment. In contrast, the Mumbai Metropolitan Region and Delhi have been identified as the least affordable. In its latest report, "Housing Affordability in Major Indian Cities," proptech firm Magicbricks revealed that the property price to annual household income ratio (P/I Ratio) in India has risen from 6.6 in 2020 to 7.5 in 2024.
According to the P/I Ratio, Magicbricks identified Chennai (5), Ahmedabad (5), and Kolkata (5) as some of the most cost-effective cities for residential investments in 2024. Conversely, the Mumbai Metropolitan Region (14.3) and Delhi (10.1) have been noted as the least affordable. Magicbricks CEO Sudhir Pai noted that in the latter half of 2021 and throughout 2022, residential investments were at their most affordable. He explained that this period saw a market resurgence, characterised by low interest rates, recovering household incomes, and a modest increase in residential prices.
Pai also observed that since then, homeownership sentiment had peaked, causing demand to significantly surpass available supply. This shift had resulted in a rapid and substantial rise in residential prices, presenting new challenges for affordable housing.
Furthermore, the report indicated that the EMI-to-monthly income ratio in India has increased from 46 per cent in 2020 to 61 per cent in 2024. This rise suggests a growing burden of EMIs on home buyers and highlights affordability concerns across the country, particularly in metropolitan areas, according to the statement. The trend is notably more pronounced in the Mumbai Metropolitan Region (116 per cent), New Delhi (82 per cent), Gurugram (61 per cent), and Hyderabad (61 per cent). In contrast, cities such as Ahmedabad (41 per cent), Chennai (41 per cent), and Kolkata (47 per cent) are relatively more affordable.
The rising property price to income ratio and the increasing EMI-to-income ratio underscore the growing affordability challenges faced by homebuyers in India. While cities such as Chennai, Ahmedabad, and Kolkata offer relatively better investment opportunities, metropolitan areas like Mumbai and New Delhi are experiencing significant affordability strains. This trend highlights the urgent need for strategies to address housing affordability and balance supply and demand. As residential prices continue to climb, both prospective buyers and policymakers must navigate these evolving dynamics to ensure sustainable and accessible housing solutions.
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