Home Affordability Remains Stable Across Six Major Cities in H1 2026; MMR and NCR Stay Above Threshold: Knight Frank

Home affordability remained within the 50% threshold in six of India's eight largest residential markets during the first half of 2026, according to news reports citing Knight Frank India's Affordability Index.  

The index calculates the share of household income required to service home loan EMIs. Pune, Hyderabad, Bengaluru, Chennai, Kolkata and Ahmedabad recorded affordability ratios below 50%, while Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR) remained above the mark. 

Ahmedabad Leads the Index 

Ahmedabad reported the lowest affordability ratio at 23%, followed by Kolkata at 25% and Pune at 28%. Chennai recorded 29%, Bengaluru 35% and Hyderabad 41%.  

Knight Frank said affordability levels in these six markets saw little change compared with 2025, even as residential property prices continued to increase. 

Mumbai, NCR Continue to Record Highest Ratios 

MMR remained the least affordable housing market with an affordability ratio of 69%, followed by NCR at 67%. These were the only two cities where homebuyers were required to spend more than half of their household income on loan repayments.  

Bengaluru and NCR recorded a marginal increase in affordability ratios from a year earlier, while the remaining cities were largely unchanged. 

Rate Cuts Offset Higher Property Prices 

According to the report, the Reserve Bank of India's cumulative 125-basis-point reduction in the repo rate lowered home loan borrowing costs during the period.  

Knight Frank said the reduction in lending rates partly balanced the impact of rising residential prices. Home sales remained close to post-pandemic levels despite higher property values across several markets. 

Long-Term Affordability Trend 

The report noted that affordability improved between 2016 and 2021 as borrowing costs declined. The cycle changed after the RBI raised the repo rate by a cumulative 250 basis points between May 2022 and February 2023.  

While policy rates have remained stable since then, residential prices, particularly in NCR, have continued to limit any improvement in affordability. 

Read More: India’s Real Estate Investments Hit 6 Year High as Domestic Capital Reaches Record $2.6 Billion! 

Conclusion 

Lower borrowing costs helped keep housing affordability stable across most cities during H1 2026. MMR and NCR remained the only two markets where affordability exceeded the 50% benchmark. 

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