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Home affordability remained stable across six of India's eight major residential markets during the first half of 2026, according to Knight Frank India's Affordability Index. While affordability improved marginally in Ahmedabad and Pune due to lower home loan interest rates, Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) continued to exceed the affordability threshold despite showing gradual improvement. The report attributes the resilience to stable lending rates, sustained income growth and moderate housing prices, indicating that residential demand remains well supported across most key urban markets.
Home affordability remained largely stable across India's leading residential markets during the first half of 2026, with six out of eight major cities maintaining affordability levels within the accepted benchmark, according to the latest Knight Frank India Affordability Index. The report suggests that a combination of stable home loan interest rates, steady household income growth and relatively moderate increases in residential property prices has helped preserve purchasing power despite continued demand in the housing market.
The affordability index measures the proportion of a household's monthly income required to service the equated monthly instalment (EMI) on a home loan. Knight Frank considers a city affordable when this ratio remains below 50%, a threshold widely regarded as financially sustainable for homebuyers. During the first six months of 2026, six major cities remained below this benchmark, indicating that housing continued to be accessible for a significant section of potential buyers.
Among the cities surveyed, Ahmedabad and Pune registered modest improvements in affordability compared to the previous assessment. The report attributes this to easing home loan interest rates and healthy income growth, which offset the impact of rising residential property prices. Lower borrowing costs have reduced monthly loan repayments, enabling prospective homebuyers to maintain purchasing capacity despite continued appreciation in housing values.
However, affordability challenges continued in the country's two largest housing markets—the Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR). Both markets remained above the 50% affordability threshold, reflecting relatively high residential property prices and larger financial commitments required from homebuyers. Nevertheless, the report noted gradual improvements in affordability in both regions, supported by favourable financing conditions and improving income levels.
Knight Frank observed that residential demand has remained resilient across India's major urban centres despite fluctuations in economic conditions. Stable mortgage rates and sustained employment growth, particularly in technology, financial services and manufacturing sectors, have encouraged homebuyers to continue investing in residential property. This has helped maintain healthy housing sales while supporting developers' confidence in launching new projects across several metropolitan markets.
The report also highlighted the importance of monetary policy in shaping homebuyer affordability. Recent reductions in policy rates have translated into lower home loan interest rates offered by banks and housing finance companies, making property purchases more financially viable for end users. Combined with gradual salary growth, these lower financing costs have improved affordability even as housing prices continue to rise in many cities.
Industry experts believe that affordability will remain a key factor influencing residential demand over the coming quarters. While premium housing markets continue to witness robust activity, maintaining affordable financing conditions will be essential to sustain demand in the mid-income and first-time homebuyer segments. Any significant rise in borrowing costs could affect affordability, particularly in high-priced urban markets.
Overall, Knight Frank's findings indicate that India's residential market continues to demonstrate resilience, with affordability remaining largely intact across most major cities. Although affordability pressures persist in MMR and NCR, the gradual improvement recorded in these markets, coupled with gains in Ahmedabad and Pune, suggests that favourable financing conditions and stable economic fundamentals continue to support homeownership across the country's leading residential destinations.
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