Most affordable residential markets: Ahmedabad, Kolkata, and Pune lead the way

In the landscape of major Indian cities, Ahmedabad, Kolkata, and Pune emerge as the top three affordable residential markets in 2023, as indicated by the recently released ‘Affordability Index’ report by Knight Frank India.

The report sheds light on a noteworthy trend, highlighting a positive shift in affordability for households in the current year. Following a temporary dip in affordability observed in 2022, the Equated Monthly Installment (EMI) to income ratio has seen improvement in 2023, signifying a positive development for prospective homebuyers.

This recognition positions Ahmedabad, Kolkata, and Pune as prime choices for individuals seeking affordable housing options.

The Affordability Index report not only reflects the current state of the real estate market but also underscores the resilience and adaptability of these cities in offering housing solutions that align with the financial capabilities of potential homeowners.

Ahmedabad, with its flourishing real estate landscape, continues to offer residences at a reasonable cost, making it an attractive prospect for those considering homeownership.

Similarly, Kolkata, with its rich cultural heritage and diverse neighbourhoods, remains a market where affordability meets housing aspirations. 

Pune, known for its burgeoning IT sector and educational institutions, maintains its status as an affordable residential hub.

As the EMI to income ratio witnesses an encouraging trend, it not only instils confidence in the real estate market but also serves as a positive indicator for economic stability. 

The affordability factor is crucial in shaping the preferences of homebuyers, and the favourable EMI-to-income ratio provides a conducive environment for individuals to realize their homeownership dreams.

The most expensive residential market in the country, Mumbai, saw an improvement of 2 per cent in its affordability index measured at 51 per cent in 2023 from 53 per cent in 2022.

“Looking at the trend from the pre-pandemic period, the city witnessed a significant improvement of 16 per cent in its affordability levels from 67 per cent in 2019,” Knight Frank India said.

An EMI/income ratio of over 50 per cent is considered unaffordable as it is the limit beyond which banks rarely underwrite a mortgage.

In conclusion, the Affordability Index report by Knight Frank India brings forth promising news for the real estate sector, spotlighting Ahmedabad, Kolkata, and Pune as beacons of affordability in the dynamic landscape of Indian cities. 

The improved EMI to income-ratio serves as a beacon of hope for prospective homebuyers, fostering a sense of optimism for the residential market in the coming years.