India Housing Affordability Improves 2025
Analysis based on 6 articles · First reported Dec 23, 2025 · Last updated Dec 25, 2025
The improved housing affordability in India's major cities, driven by the State Bank of India's repo rate cuts, is expected to sustain residential sales and overall economic momentum. This positive trend, particularly in India — Mumbai, signals a more sustainable housing market, benefiting the real estate and banking sectors.
Housing affordability in India's major cities significantly improved in 2025, primarily due to lower home loan interest rates following the State Bank of India's cumulative 125 basis point repo rate cut since February 2025. The Knight Frank's Affordability Index report highlights that affordability improved in seven of the top eight cities. India — Ahmedabad emerged as the most affordable, while India — Mumbai achieved a historic milestone with its EMI-to-income ratio falling below 50% for the first time. This indicates a more sustainable housing environment and is expected to support residential sales momentum into 2026, underpinned by resilient economic growth and easing inflation. The India — National Capital Region (India) was the only market to see a marginal deterioration in affordability, driven by rising premium housing prices.
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