Homebuyer affordability in India’s residential markets stayed favorable in the first half of 2026, supported by a total monetary easing of 125 basis points. According to a report by Knight Frank India, Ahmedabad emerged as the most affordable among the top eight cities, with a ratio of 23 percent. Six out of the eight cities monitored maintained affordability below the 50 percent threshold, with Kolkata at 25 percent and Pune at 28 percent.
Affordability levels in the Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) continued to exceed the 50 percent affordability threshold. Bengaluru and NCR saw a slight decline in affordability, standing at 35 percent and 65 percent, respectively, compared to 2025. The report highlighted that lower borrowing costs are expected to sustain housing demand in the second half of 2026.
The affordability index, which measures the proportion of household income spent on EMIs, indicated that the cumulative impact of reduced borrowing costs is anticipated to bolster housing demand in the latter half of 2026. Affordability improved during the pandemic as the Reserve Bank of India (RBI) lowered the policy repo rate significantly. However, due to increased inflation, the RBI raised the repo rate by 250 basis points over nine months starting May 2022, leading to a decline in affordability that year.
Despite rate stability from early 2023 onwards, affordability levels remained high due to escalating prices, especially in the NCR. The RBI’s recent 125 basis points cumulative easing before the current pause has supported home loan affordability, aiding residential sales to remain close to the post-pandemic highs seen in 2024.
Shishir Baijal, International Partner, Chairman, and Managing Director at Knight Frank India, noted that affordability gains have moderated primarily due to rising property prices. He emphasized that sustained income growth and balanced market fundamentals are crucial for maintaining housing affordability and fostering long-term market growth.
