Home affordability remained largely stable across India’s major residential markets during the first half of 2026, as lower home loan interest rates continued to offset the impact of rising property prices, according to Knight Frank India’s latest affordability assessment.
The report found that six of the country’s eight leading housing markets remained within the affordability benchmark, where monthly home loan repayments account for less than 50% of a household’s income.
Ahmedabad retained its position as India’s most affordable residential market, with equated monthly instalments (EMIs) accounting for 23% of household income. Kolkata followed at 25%, while Pune recorded an affordability ratio of 28%. In contrast, the Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) continued to remain above the affordability threshold.
Knight Frank attributed the stable affordability levels to the Reserve Bank of India’s cumulative 125 basis points reduction in policy rates since February 2025, which has helped keep home loan interest rates competitive despite continued appreciation in residential prices. Home loan rates currently begin at around 7.1% for borrowers with strong credit profiles.
“Housing affordability remains a key driver of residential demand. The cumulative benefit of lower interest rates continues to support homebuyers across most markets, helping sales remain close to post-pandemic highs. Over the years, affordability gains have moderated mostly due to the rise in property prices. However, healthy employment, stable incomes and supportive financing conditions continue to underpin demand,” said Shishir Baijal, International Partner, CMD, Knight Frank India.
Jaxay Shah, chairman, Savvy Group, added, “Ahmedabad has consistently remained an end-user-driven market where housing demand is supported by relatively affordable prices, steady economic growth and improving infrastructure. While lower interest rates have certainly helped improve affordability, the city’s balanced price appreciation has ensured that homeownership remains accessible to a wider section of buyers. Going forward, sustained income growth and infrastructure-led development will be key to preserving this advantage.”
Among the major cities, Bengaluru witnessed a slight decline in affordability, with the ratio increasing from 34% to 35%, while NCR rose from 66% to 67%. MMR remained India’s least affordable housing market at 69%.
The report also noted that affordable housing prices increased by 6–18% year-on-year in NCR and 3–5% in MMR, while the remaining major cities recorded price growth of 3–8%, reflecting continued resilience in India’s residential property market.
Source: The Economic Times
