Buying a home? These are the most and least affordable cities in India in 2024; complete list

Which is the most affordable city to live in India in 2024? A recent report by MagicBricks looked at two key metrics – price-to-income ratio and EMI-to-income ratio – across the country to find out. The report, titled ‘Housing Affordability in Major Indian Cities 2024’, has revealed that Chennai, Ahmedabad, and Kolkata are the most affordable destinations for residential investments in India in 2024. A globally-recognized affordability parameter of a price-to-income ratio of 5 or less was used to assess the affordability of various cities. According to the report, property prices in these three cities are more in line with local incomes, making housing more affordable for residents. This suggests that the real estate markets in these cities are relatively balanced.

The report also highlighted the upward trend in housing prices across the country. Over the past four years, average house prices in India have increased by 46%, with Hyderabad and Noida experiencing particularly sharp increases of 78.6% and 69% respectively.

While household incomes in the top 10 cities grew at a compound annual rate of 5.4% between 2020 and 2024, property prices rose at a compound annual rate of 9.3%, exacerbating the affordability challenge. The price-to-income ratio, a key indicator of affordability, has risen from 6.6 in 2020 to 7.5 in 2024, indicating that housing has become less affordable as property prices have outpaced average income growth.

Mumbai Metropolitan Region (MMR) and Delhi were found to be the least affordable cities, with price-to-income ratios of 14.3 and 10.1, respectively. Gurugram also faces substantial affordability pressures, with a ratio of 7.5. These figures show the growing gap between property prices and household incomes in these urban centres.

While cities like Delhi, Bengaluru, Hyderabad and Gurugram offer higher household incomes, making it easier for residents to buy homes in cities with lower property prices like Ahmedabad, Chennai, Kolkata and Pune, home seekers in lower-income cities face affordability issues across the country.

The rise EMI/monthly income ratio The monthly installment to monthly income ratio is another indicator of affordability. From 46% in 2020, this ratio has increased to 61% in 2024, reflecting the increasing burden of monthly installments on home buyers. New Delhi has a monthly installment to monthly income ratio of 82%, while MMR, Gurugram and Hyderabad have monthly installment to monthly income ratios of 116%, 61% and 61% respectively. In contrast, cities such as Ahmedabad, Chennai and Kolkata offer more favourable terms with monthly installments below 50% of monthly income. The monthly installment to monthly household income ratio in various cities indicates the proportion of a household’s monthly income spent on paying monthly installments on home loans. In cities such as Ahmedabad, Chennai, Kolkata and Pune, most home buyers were paying approximately 50% of their income in monthly installments. In contrast, in cities like Gurugram, Hyderabad, MMR and New Delhi, the ratio of monthly household installment to household income is often above 50% of monthly income, putting increased financial pressure on homeowners. Sudhir Pai, CEO, Magicbricks, commented, “Between the second half of 2021 and 2022, residential investments were more affordable. During this period, the market saw a resurgence, characterised by low interest rates, recovering household incomes and a modest increase in home prices. However, since then, homeownership sentiment has peaked, resulting in demand significantly outstripping available supply, leading to a rapid and substantial increase in home prices, presenting new challenges for affordable housing.”