Ahmedabad, Pune, and Kolkata lead in housing affordability; Mumbai improves, NCR slips
The Reserve Bank of India's repo rate cut in H1 2025 has boosted housing affordability, particularly in Ahmedabad, Pune, and Kolkata, now ranked as the top three most affordable residential markets among eight Indian cities, according to Knight Frank India's Affordability Index. Ahmedabad, Pune, and Kolkata, now ranked as the top three most affordable residential markets among eight Indian cities, according to Knight Frank India's Affordability Index. (Photo for representational purposes only)(Pixabay)
Ahmedabad leads with an affordability ratio of 18%, followed by Pune at 22% and Kolkata at 23%. Mumbai remains the least affordable market with a ratio of 48%, though notably, it has dropped below the 50% threshold for the first time in the history of the index.
In Mumbai, the affordability index improved by over 2 percentage points, from 50% in 2024 to 48% in H1 2025, marking the first time the city has dipped below the 50% threshold, which is considered the upper limit of affordability. Traditionally above this benchmark, Mumbai's market has become relatively more affordable due to lower home loan interest rates, the report said. NCR's affordability levels decline due to increase in housing prices
In contrast, affordability levels in the National Capital Region (NCR) have slightly worsened, with households now needing to spend 28% of their income to buy an average home, up from 27% in 2023. This decline in affordability is attributed to a sharp rise in residential prices, which has offset the benefits of recent interest rate cuts, the report said.
Knight Frank India's Affordability Index, which tracks the EMI (Equated Monthly Instalment) to income ratio for an average household, witnessed steady improvement from 2010 to 2021 across the eight leading cities of India especially during the pandemic when the Reserve Bank of India (RBI) cut policy repo rate (REPO) to decadal lows, the report noted.
The central bank subsequently raised the REPO rate by 250 bps in a space of nine months starting May 2022 to address high inflation which caused stress on affordability levels. However, with inflation worries subsiding and economic growth regaining focus, the RBI slashed the REPO rate by 100 bps since February 2025. This has improved affordability across 7 of the 8 cities in H1 2025.
The Knight Frank Affordability Index indicates the proportion of income that a household requires, to fund the monthly instalment (EMI) of a housing unit in a particular city.
So, a Knight Frank Affordability index level of 40% for a city implies that on an average, households in that city need to spend 40% of their income to fund the EMI of housing loan for that unit. An EMI/ Income ratio over 50% is considered unaffordable as it is the limit beyond which banks rarely underwrite a mortgage.
Also Read: Housing sales drop by 19% across nine cities, and supply dips by 30%.; Mumbai sees steepest decline: Report
"Affordability plays a critical role in maintaining homebuyer demand and sustaining sales momentum, both of which are vital contributors to the broader economy. As incomes grow and the economy gains strength, financial confidence among end-users improves, motivating them to commit to long-term investments such as home ownership. Given the RBI's healthy 6.5% GDP growth estimate for FY 2026 and a favourable interest rate scenario, affordability levels are expected to be supportive of homebuyer demand in 2025,' said Shishir Baijal, chairman and managing director, Knight Frank India.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
33 minutes ago
- Hindustan Times
Recover ₹65.9 cr from accounts of convicts: High Court to Canada
New Delhi The Delhi high court has allowed the Canadian government to recover ₹ 65.9 crore from Indian bank accounts of Indian origin Ontario bureaucrat Sanjay Madan and his associate Vidhan Madan, in connection with a ₹ 290 crore fraud case being pursued before Canadian courts, and directed IndusInd and RBL bank to remit the amount. A bench of justice Manmeet Pritam Singh Arora passed its June 23 order, after Sanjay, who appeared virtually, did not object to the transfer (Getty Images/iStockphoto) In April 2023, Sanjay Madan was sentenced to 10 years of imprisonment, after he pleaded guilty to stealing $47.4 million Canadian dollars from the Ontario government. The government had accused Madan of exploiting his senior position within the Ontario ministry of education and stealing nearly $11 million by manipulating Ontario's Support for Families Program (SFFP) implemented during Covid-19. Sanjay was also accused of rigging the selection process for IT Consultants as a Director of the i-Access Branch with his associate Vidhan, and receiving more than $36 million through kickbacks from 2011 to 2020. A bench of justice Manmeet Pritam Singh Arora passed its June 23 order, after Sanjay, who appeared virtually, did not object to the transfer and asserted that the funds lying in account held by the two in IndusInd and RBL bank, were sufficient to pay the settlement amount of ₹ 65.9 crore. He, however, said that the accounts were lying dormant and undertook to execute all the necessary documents for re-enabling their operation and repatriation of the amount to the government. As a part of the plea agreement, Madan had agreed to repay the 30 million upfront and pay the remaining over 15 years. The court had also restrained Madan and his associate Vidhan Madan from dissipating their assets including those located outside Canada. Vidhan was accused of transferring ill gotten gains received from the two fraudulent schemes from Canada to India. Considering the submissions the court thus directed Madan to cooperate with the banks for reenabling their operation within two weeks and thereafter remit the amount to the Canadian government's bank account. 'In view of the submissions of counsel for the Defendant No. 1 and the Defendant No.1 himself who appeared through Video Conferencing Link, the Defendant No.5/IndusInd and Defendant No.10/RBL are directed to co- operate with the Defendant No.1 in getting the KYC compliance done within two (2) weeks qua the bank accounts held in the name of Defendant No.1 in their respective banks. After the above said KYC compliance is done, Defendant No. 5 and Defendant No. 10 are further directed to remit an amount to the tune of Rs. 65.9 Crores in the bank account of the Crown/Plaintiff in accordance with applicable law/rules,' the court said in its order. The court issued the directions while considering an application filed by the Canadian government seeking to restrain the duo from operating or transacting the funds held in their Indian bank accounts. The application was filed in the suit seeking recovery of funds allegedly diverted to India as a part of the fraud. The suit stated that Madan had admitted before the Canadian court that he had diverted certain funds out of the proceeds of crime to India and used them to also buy properties in India. In its 12-page order, the judge further barred Sanjay and Vidhan from operating their Indian account pending further orders, with limited exceptions including remittance of ₹ 65.9 crores and payment of legal fees to the counsel, backed by a valid documentation. 'In view of the statement of Defendant No. 1 and the e-mail response of Defendant No. 2, Defendant Nos. 1 and 2 are restrained from transacting from their Indian Bank accounts until the final disposal of this application,' the court said in its order. The court also issued summons in the suit and fixed September 2 as the next date of hearing.
The Hindu
an hour ago
- The Hindu
The Hindu Morning digest: June 26, 2025
Used trade deal threat to get India-Pakistan ceasefire, says Trump U.S. President Donald Trump has once again claimed that he got India and Pakistan to agree to a ceasefire in May using trade deals with the U.S. as leverage. In The Hague for the North Atlantic Treaty Organization (NATO) summit, Mr. Trump mentioned India and Pakistan as part of a set of conflicts he claimed he settled during a press conference. 'But maybe the most important of all, India and Pakistan, and that wasn't whether or not they may someday have nukes... like we're talking about with Israel and have nuclear weapons,' Mr. Trump said. Pilgrims visit Mount Kailash, Mansarovar after six-year wait Six years after the last Kailash Mansarovar yatra (pilgrimage) was held, a group of 36 Indian pilgrims conducted the arduous trek around the 18,000-feet-high Mount Kailash and took in the waters at the Mansarovar lake. The first batch included all ages from 18 to 69, the group's organising leaders told a group of Indian journalists at the Zhunzhu Pu hostel, where they will stay for a few nights as they complete their Parikramas (circling the mountain and lake). Each group includes a doctor, and the Ministry of External Affairs, which is the nodal agency for the Kailash Mansarovar Yatra body has also coordinated with the Chinese government to allow Indian cooks to travel ahead of the group and set up tents to provide them with food they are more familiar with. GST Council set to discuss reducing items in 12% slab The agenda for the Goods and Services Tax (GST) Council at its next meeting will include deliberations on minimising the 12% tax slab and also finalising the tax treatment on service intermediaries, which could provide the sector relief worth thousands of crores, according to informed sources. Further, while the meeting was initially supposed to be held in June, there has been some back-and-forth between members of the Council over the location of the meeting, leading to delays. It will now likely be held in July 2025, which would be more than six months after the last meeting, which was held in December 2024 in Jaisalmer. 'One of the main agenda items, as part of the overall simplification and rate rationalisation effort, is what to do with the 12% slab,' an official aware of the developments told The Hindu. 'One of the internal recommendations was to minimise the slab or maybe even do away with it entirely.' Congress chief takes a swipe at Shashi Tharoor, says 'for some Modi comes first, country later' Lok Sabha member Shashi Tharoor's remarks praising Prime Minister Narendra Modi in an opinion piece published in The Hindu on June 23 sparked a fresh round of political sparring on Wednesday (June 25, 2025), with Congress president Mallikarjun Kharge asserting that for his party, the nation takes precedence over individuals. 'For our party, the country comes first, but for some others, Modi comes first and the country later,' Mr. Kharge said at a press conference when asked about Mr. Tharoor's article. Without naming Mr. Kharge, Mr. Tharoor responded on social media platform X with a cryptic message. The Congress MP posted an image of a bird with the caption: 'Don't ask permission to fly. The wings are yours. And the sky belongs to none.' Union Cabinet passes resolution marking 50 years of Emergency The Emergency, the 50th anniversary of which is being marked on Wednesday (June 25, 2025), is an event that will never be forgotten, Prime Minister Narendra Modi said. He led the Union Cabinet in passing a resolution, vowing to commemorate and honour the sacrifices of those who fought against the suspension of democratic rights and the Constitution. The Union Cabinet observed a two-minute silence as a tribute to the victims of the Emergency, which was declared on June 25, 1975. 2025 marked 50 years of the 'Samvidhan Hatya Diwas' ('Constitution murder day') as it is now being marked by the government, Union Information and Broadcasting Minister Ashwini Vaishnaw said, briefing media after the Cabinet meeting. Himachal Pradesh cloudbursts, flash floods | 2 dead, 20 feared swept away in Kangra Two persons died while about 20 were feared swept away as cloudbursts, flash floods and heavy rain wreaked havoc in Himachal Pradesh on Wednesday (June 25, 2025). Two bodies were recovered from the Manuni Khad in Kangra district while around 15-20 workers stationed at a labour colony near the Indira Priyadarshini Hydroelectric project site were feared swept away following a surge in water level in the Khaniyara Manuni Khad. Teams from the State Disaster Response Force (SDRF), local administration, gram panchayat, and the revenue department have reached the spot to carry out search and rescue operations. New ECINET platform used during bypolls helped with faster update of voter turnout trends: ECI The bypolls in four States held earlier this month saw the use of the new ECINET platform that helped in the faster uploading of voter turnout trends and publishing of Index Cards within 72 hours of the declaration of election results by the Election Commission of India (ECI). The Index Card is a non-statutory, post-election statistical reporting format aimed at promoting accessibility of election-related data at the constituency level for all stakeholders. Under the new system, most data fields in the Index Card are auto-filled using ECINET inputs. Before the introduction of ECINET, the publication of Index Cards used to take several days, weeks, or even months, as the data was filled and verified manually by the officials, the EC said in a statement. Media bodies urge Centre to keep journalistic work outside the ambit of Digital Personal Data Protection Act The Press Club of India (PCI), along with 21 other press bodies, has submitted a joint memorandum urging Union Minister Ashwini Vaishnaw to keep the professional work of journalists outside the scope of the Digital Personal Data Protection (DPDP) Act, 2023. The memorandum has been endorsed by over 1,000 journalists and photojournalists from across the country, the PCI said on Wednesday (June 25, 2025). 'The concerns expressed in the memorandum were put together by the PCI after a close study of various definitions and provisions of the Act with legal and personal data experts. It was found that the Act comes directly against the journalists' fundamental right to work granted by Article 19 (1) (a) and (g) of the Constitution,' the PCI's statement said. Trump says U.S., Iranian officials will talk next week as ceasefire holds Israel and Iran seemed to honour the fragile ceasefire between them for a second day Wednesday (June 25, 2025) and U.S. President Donald Trump asserted that American and Iranian officials will talk next week, giving rise to cautious hope for longer-term peace. Mr. Trump, who helped negotiate the ceasefire that took hold Tuesday (June 24, 2025) on the 12th day of the war, told reporters at a North Atlantic Treaty Organization summit that he was not particularly interested in restarting negotiations with Iran, insisting that U.S. strikes had destroyed its nuclear program. Earlier in the day, an Iranian official questioned whether the United States could be trusted after its weekend attack. 'We may sign an agreement; I don't know,' Mr. Trump said. 'The way I look at it, they fought; the war is done.' Iran Parliament passes resolution to suspend cooperation with IAEA Iran's Parliament (Majles) passed a resolution on Wednesday (June 25, 2025) to suspend the country's cooperation with the International Atomic Energy Agency (IAEA). The development was shared on social media by the Embassy of Iran. The announcement came soon after the Embassy of Iran expressed 'heartfelt gratitude' to the people of India for extending support to Iran during the 12-day war with Israel. Iran's Ambassador to India Iraj Elahi also took to social media and criticised the U.S. for its June 22 attack on three nuclear sites reminding that Iran faced the attacks despite being a member of the IAEA and NPT (Nuclear non-Proliferation Treaty). U.K.'s Starmer faces major rebellion over welfare cuts British Prime Minister Keir Starmer on Wednesday (June 25, 2025) doubled down on controversial plans to cut disability and sickness welfare amid the biggest rebellion by lawmakers of his premiership. Labour's Mr. Starmer, who has had a bumpy first year in power since ousting the Conservatives in a landslide election victory last July, insisted that a vote on the proposed legislation would go ahead on Tuesday. His government is under pressure to slash a spiralling benefits bill as Chancellor Rachel Reeves tries to generate much-needed growth from a sluggish U.K. economy. The Premier's defiant words came as at least 120 Labour MPs, nearly a third of the 403 in parliament, publicly backed a move to block the proposals. Rishabh Pant reaches career-high 7th in ICC Test rankings India's swashbuckling wicketkeeper Rishabh Pant reached a career-high seventh in the latest ICC Test rankings for batters on Wednesday (June 25, 2025), following his twin centuries in the series opener against England in Leeds. Pant, who became only the second wicketkeeper to hit two hundreds in the same match during the first Test of the five-match series, climbed one spot in the list. Before the 27-year-old Pant joined him, Zimbabwe's Andy Flower remained the sole stumper with two centuries in the same Test match.
Economic Times
an hour ago
- Economic Times
PSU Banks' share in CD issuance rises to 69% from 6% in three years
Mumbai: Public sector banks have stepped up issuance of certificates of deposits (CD) since early 2022, leading to their market share zooming from single digit to nearly 70% in three years. ADVERTISEMENT "It has been observed that during the Covid-induced liquidity surplus phase, private banks were frontrunners in issuing the CDs. However, after February 2022, PSBs dominated the share in CD issuance. Foreign banks and relatively new small finance banks have limited presence in the CD market," according to an article published in Reserve Bank of India's June bulletin. Between January 2022 and December 2024, the share of public sector banks in CD issuances rose to 69% from 6%, while that of private banks fell to 30% from 85%. "This contrasts with the general belief that issuance of CDs is dominated by private banks to complement their current and savings account (CASA) deposits," said the article, authored by the RBI staff. Views in the article are those of the authors and do not necessarily represent those of the RBI. Liquidity, interest rate expectation, and volatility determine CD issuance in the long run. Increase in credit advances with lower deposit mobilisation also prompts higher is found to be the major driver of CD issuances in the short run as well. In January-March of 2025, CD issuances had reached an all-time high of ₹3.70 lakh crore, in the backdrop of higher credit demand coupled with deficit liquidity and subdued deposits' tenor of the CD issuance and the weighted average effective interest rate (WAEIR) are tracked to gauge short-term funding dynamics among different categories of commercial banks. ADVERTISEMENT The article said the average tenor of CDs issued by private sector banks is higher at 222 days, implying that they raise funds to not just meet the short-term funding requirements but also for locking in lower interest rates. "PSBs have an average tenor of 155 days, indicating use of CDs mostly as instruments for their short-term funding needs," it said, adding that these banks enjoy lower cost of CD issuance on an average than others. (You can now subscribe to our ETMarkets WhatsApp channel)
