Most and least affordable cities to buy property in India in 2024: Is your city on the list? (Image source: iStock)
New Delhi:Property prices in India have skyrocketed over the past decade, especially after the pandemic, making it difficult for people to buy homes. While real estate prices continue to rise in both big and smaller cities, a recent report by Magicbricks revealed that Chennai, Ahmedabad and Kolkata are the most affordable metropolitan cities for residential investments in 2024.
Less affordable cities
According to the report, Mumbai and Delhi metropolitan areas are the least affordable cities for property buyers. Between 2020 and 2024, household incomes in India’s top 10 cities grew at a compound annual growth rate (CAGR) of 5.4 percent. However, property prices rose faster, at a CAGR of 9.3 percent.
Property prices vs. income
The report also highlights that the ratio of property price to annual household income (P/I ratio) in India has increased from 6.6 in 2020 to 7.5 in 2024. This figure is much higher than the global benchmark of 5, indicating a growing gap between incomes and property prices.
Mumbai has the highest price-earnings ratio of 14.3, followed by Delhi at 10.1, making them the most expensive cities for home buyers. On the other hand, Chennai, Kolkata and Ahmedabad have a price-earnings ratio of 5, making them more affordable options for those looking to invest in residential properties.
EMI burden on home buyers
The report also shows that the burden of monthly installments paid by homebuyers has increased. The ratio of monthly installments to monthly income in India increased from 46% in 2020 to 61% in 2024. This means that a larger portion of people’s income is going towards paying off home loans.
The EMI burden is particularly high in Mumbai metropolitan area (116%), Delhi (82%), Gurugram (61%) and Hyderabad (61%). In contrast, cities like Ahmedabad (41%), Chennai (41%) and Kolkata (47%) are much more affordable in terms of EMI payments.
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