Affordability index for home buying drops in NCR marginally but improves in Mumbai: Knight Frank

New Delhi, Dec 23 (PTI) A sharp rise in housing prices across Delhi-NCR has affected affordability to purchase homes despite a reduction in interest on home loans, according to Knight Frank.

In a statement on Tuesday, real estate consultant Knight Frank India mentioned that affordability has improved in Mumbai this year.

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.

An index level of 40 per cent for a city implies that, on average, households in that city need to spend 40 per cent of their income to fund the EMI of a housing loan for that unit. An EMI/income ratio over 50 per cent is considered unaffordable.

According to the Index, Ahmedabad is the most affordable housing market among the top eight cities, with a ratio of 18 per cent, followed by Pune and Kolkata at 22 per cent.

In Mumbai, housing affordability has improved significantly, with the EMI-to- income ratio declining to 47 per cent in 2025.

The affordability index drops marginally in NCR to 28 per cent in 2025 from 27 per cent in the preceding year.

"In contrast, the NCR was the only major market to register a deterioration in affordability during the year, driven by a sharp rise in weighted average prices due to heightened activity at the premium end of the market," the consultant said.

Nevertheless, Knight Frank said that the affordability levels in NCR remain well within acceptable limits. PTI MJH HVA