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Imagine buying a home in Hyderabad today—it’s 80% costlier as compared to what it was 4 years ago. The same holds in MagicBricks research that exhibited this growth, and just like the Indian real estate industry is growing exponentially.
And within four years only, the overall property price-to-income ratio of India increased from 6. 6 to 7. 5, which is well above the World Health Organization’s recommendation of 5. While home prices rise, income increases at a much slower pace, thus putting a lot of pressure on family budgets as they struggle to buy homes.
This increase indicates still expanding the housing price-income ratio. As ratios of home prices to income levels climb, the P/I ratio rise indicates increasing pressure on housing affordability throughout a country.
Real estate in Hyderabad remains attractive for investment, and it is growing steadily, but the above-cited report reveals that the three cheapest cities are Chennai, Ahmedabad, and Kolkata, each of which has a P/I ratio of 5. However, MMR and Delhi fall in the least affordable city rank with a ratio of 14.3 and 10.1, respectively.
Well, it appears that homebuyers as a class are feeling the pinch! It also shows that the EMI to monthly income ratio has spiked up, especially from 46% in 2020 to 61% in 2024. This is very evident where MMR, Delhi, and Hyderabad are the worst off in this regard, but Ahmedabad, Chennai, and Kolkata provide some sort of respite financially.
The research, however, is comforting in regard to the housing market since it posits that the market may be nearing stabilization. It expects a further increase in the residential supplies that would help slow down the fast-growing rate of prices for houses and stabilize the housing segment. That change could help to decrease the financial burden on first-time homeowners and make the market more stable in the long run.
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