Mumbai's Housing Market Sees Unprecedented Affordability Shift

Mumbai, historically the least affordable city for homebuyers, has seen an improvement in affordability due to reduced mortgage rates, with the affordability index dropping below 50% for the first time since 2010. This shift highlights increasing affordability across India's major cities as mortgage rates decrease.

Mumbai has long been known as the least affordable city among India's top eight cities for homebuyers. However, the latest report from Knight Frank India reveals a significant shift. Thanks to a reduction in mortgage rates, Mumbai's affordability index has fallen below 50% for the first time since 2010.

According to the 'Affordability Index' report, which measures the ratio of EMI to income for average households, a ratio above 50% is deemed unaffordable. In 2025's first half, Mumbai's index dropped to 48%, a notable improvement from 50% in 2024. The trend signals a broader increase in housing affordability across major cities.

Experts attribute this improvement to strategic interest rate cuts by the Reserve Bank of India, helping mitigate the EMI load on homebuyers. This development is poised to encourage more investment in residential markets as economic growth, rising incomes, and falling inflation create a more conducive environment for purchasing homes.