Home Loan Rate Cuts Boost India's Housing Affordability in 2025: Report

• India's housing affordability improved in 2025 due to significant home loan interest rate drops since late 2024, as per Knight Frank India's Affordability Index.
• Mumbai's EMI-to-income ratio fell to 47%, marking the first time it dropped below the 50% threshold, indicating improved affordability.
• Ahmedabad is the most affordable market at 18% EMI-to-income ratio, followed by Pune and Kolkata at 22%.
• RBI's 125 bps repo rate cut since February 2025 further enhanced affordability, supporting strong residential sales.
• NCR saw a deterioration in affordability due to rising premium property prices, while Bengaluru and Hyderabad remained stable.

Why It Matters: India's housing affordability significantly improved in 2025 due to rate cuts, with Mumbai reaching a historic low.