Affordable Cities in India in 2024: Finding an affordable city in India can be a game-changer, especially in 2024 when the cost of living has been varying significantly.
From bustling metros to serene tier-2 cities, affordability doesn’t just mean low costs—it also considers quality of life, access to amenities, and growth opportunities.
2024: The Most Affordable Cities in India
A recent analysis was done by a market source investigating the price-to-income ratio and the EMI-to-income ratio in various cities of the country.
According to the source, Chennai, Ahmedabad, and Kolkata are the most affordable cities for residential investments in India in 2024.
It used a globally recognized affordability benchmark of a price-to-income ratio of 5 or lower to assess the affordability of various cities.
According to the report, property prices in these three cities are more in line with local incomes, making housing more accessible to residents.
This suggests that the real estate markets in these cities are relatively balanced.
Rising Housing Costs:
There has been a nationwide trend of increasing housing costs. The average housing prices in India have increased by 46% over the past four years.
Hyderabad saw an impressive 78.6% increase, closely followed by Noida with a 69% increase.
This growth rate is still very small, even if household incomes in the top 10 locations grew at an average rate of 5.4% per year from 2020 to 2024.
The difficulty of finding reasonably priced housing became more pronounced as the cost of residential units surged at a rate of 9.3 percent annually.
Important indicators of affordability, the ratio of the price to the income has changed from 6.6 in the year 2020 to 7.5 in the year 2024.
This ratio is an essential measure of affordability.
This indicates that housing has become less affordable as a result of the fact that property prices have outpaced the growth of the average salary.
Affordable Cities: The Minimum & Maximum in Affordability to Buy Home
With price-to-income ratios of 14.3 and 10.1, respectively, Mumbai Metropolitan Region (MMR) and Delhi emerged as the cities with the lowest accessibility to affordable housing markets.
In addition, Gurugram is facing substantial affordability difficulties, as evidenced by a ratio of 7.5.
The figures shown here reflect the growing disparity between housing prices and household incomes in key urban areas.
Even though cities like Delhi, Bengaluru, Hyderabad, and Gurugram have greater family earnings, making it easier for citizens to afford properties.
In cities with lower property prices such as Chennai, Kolkata, Ahmedabad, and Pune, relatively making it easier for homebuyers. However, the lower income groups face concerns about the unaffordability of housing across the country.
EMI-to-monthly income ratio: Affordable Cities
The increasing EMI-to-monthly income ratio is another sign of affordability.
The ratio has risen from 46% in 2020 to 61% in 2024, showing how home buyers are feeling the increasing impact of EMIs.
New Delhi has an EMI-to-monthly income ratio of 82%, while Gurugram, MMR, and Hyderabad have ratios of 116%, 61%, and 61%, respectively.
Ahmedabad, Chennai, and Kolkata, on the other hand, are better places to live because the monthly payments for capital and interest are less than fifty percent of income.
A good indicator of how much of a household’s income goes toward paying home loan EMIs each month is the ratio of monthly income to EMIs in a certain area.
In cities like Ahmedabad, Chennai, Kolkata, and Pune, homebuyers paid less than 50% of their salaries in monthly installments (EMIs).
In cities like Gurugram, Hyderabad, MMR, and New Delhi, on the other hand, the monthly family income-to-EMI ratio is always close to 50%. In other words, this means that homebuyers are under more financial pressure.
Residential investments were most cost-effective in the second half of 2021 and early 2022. Lower interest rates, rising household earnings, and a slight increase in the cost of residential real estate helped the market to rebound significantly at this point.
However, the surge in the interest in owning a home has driven demand for homeownership much above supply. Rapidly rising housing costs make it difficult to find accommodation within one’s means.
When it comes to affordable housing, cities that have the potential to be an excellent destination for buyers and investors who are interested in purchasing a property in the year 2024 include, Chennai, Ahmedabad, Pune, and Kolkata.
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