Housing in Bengaluru is more affordable than Hyderabad: Says Reports

Hyderabad has now secured its place as the second least affordable housing market in India, surpassing Bengaluru, according to the latest Affordability Index report by Knight Frank India. The report reveals that households in Hyderabad allocate around 30% of their income toward home loan EMIs, trailing only behind Mumbai, where the ratio stands at a steep 50%.

Ahmedabad Leads in Affordability, Followed by Pune

The index, which evaluates housing affordability across major Indian cities, identifies Ahmedabad as the most budget-friendly city for homeowners. With only 20% of household income required for EMIs, Ahmedabad is followed by Pune, Kolkata, and Bengaluru, where residents spend approximately 27%. Chennai fares slightly better, with its affordability ratio at 25%, while the National Capital Region (NCR) shares Bengaluru's position.

Stability in Housing Affordability

The consistent affordability in cities like Hyderabad can be attributed to stable interest rates and rising incomes, counterbalancing the effects of escalating property prices. Over the past decade, lower interest rates and a growing economy have significantly improved housing affordability across urban India.

The pandemic years saw a significant boost to affordability as the Reserve Bank of India (RBI) slashed repo rates to historic lows. Cities like Hyderabad, Chennai, and Mumbai benefited from this move. However, between May 2022 and February 2023, the RBI raised the repo rate by 250 basis points to curb inflation, which temporarily affected housing affordability. Since then, the unchanged repo rate and growing incomes have helped offset the impact of rising housing costs.

Hyderabad's Affordability Steady Since 2022

For three consecutive years, Hyderabad’s housing affordability ratio has remained unchanged at 30%. In comparison, Mumbai has seen gradual improvement, dropping from 67% in 2019 to 50% in 2024, though it continues to exceed the affordability benchmark. Meanwhile, Bengaluru recorded a minor dip, with its ratio moving from 26% in 2023 to 27% in 2024, still well within the affordable threshold of 50%.

Knight Frank’s report highlights how evolving economic factors and market dynamics continue to shape housing affordability in India’s metropolitan cities.

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