House purchase affordability in Mumbai hit a 15-year high following the central bank's recent rate cuts that reduce mortgage costs, a property consultant's report said.
An average household in Mumbai spent 48% of their income toward monthly installments of a home loan, versus 50% last year, according to Knight Frank's affordability index for the first six months of 2025.
That compares with below 30% in the National Capital Region and in Bengaluru, and 18% for Ahmedabad, making the country's financial capital the least affordable housing market by far among India's top eight cities. NCR consists of New Delhi and its suburbs.
The Reserve Bank of India has cut interest rates by a total of 100 basis points this year, a move that makes home loans cheaper and is expected to boost demand for residential properties in the world's fifth-largest economy.
“Affordability levels are now at their best since the pandemic and are significantly better than the levels seen at the end of 2024, just before the first rate cut announced in February 2025,” according to the Knight Frank report.
To be sure, stagnant incomes because of a slowing economy and a steep rise in property prices is beginning to weigh on home sales in key markets after runaway growth in the last two years. Housing sales across the top seven cities in India declined by 28% year-on-year from January-March, according to a 2025 report by real estate broker ANAROCK.
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