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Mumbai Housing Affordability Breached for First Time
23 Dec
Summary
- Mumbai's housing affordability index fell below 50% for the first time.
- Housing affordability improved in seven of India's top eight cities in 2025.
- Lower home loan interest rates and steady income growth drove affordability gains.
India's housing market experienced a significant affordability boost in 2025, with seven of the top eight cities seeing improvements. Mumbai, historically India's most expensive real estate market, has breached the affordability threshold for the first time, with its EMI-to-income ratio now at 47%. This marks a substantial shift from previous years and indicates a more sustainable housing market.
The positive trend is largely attributed to a 125 bps reduction in the repo rate by the Reserve Bank of India since February 2025. This, coupled with steady income growth, has reversed the affordability challenges faced in 2022. While NCR was the sole market where affordability slightly worsened due to premium launches, cities like Ahmedabad, Pune, and Kolkata remain highly affordable.
