Hyderabad continued to be the third least affordable residential market among India’s eight major cities during the first half of 2026, with households requiring 41% of their monthly income to service home loan equated monthly instalments (EMIs), according to Knight Frank India’s latest Affordability Index. The affordability level remained unchanged from the end of 2025 despite the cumulative 125 basis points of monetary easing by the Reserve Bank of India (RBI).
The Affordability Index measures the proportion of household income required to fund monthly EMIs for a housing unit. According to Knight Frank, an EMI-to-income ratio above 50% is considered unaffordable, as banks rarely underwrite mortgages beyond that level.
Only the Mumbai Metropolitan Region (69%) and the National Capital Region (67%) recorded higher EMI-to-income ratios than Hyderabad (41%). Bengaluru stood at 35%, followed by Chennai (29%), Pune (28%), Kolkata (25%) and Ahmedabad (23%), making Ahmedabad the country’s most affordable residential market among the eight cities analysed.
The report said six of the eight cities remained within the affordability threshold of 50%. Affordability worsened marginally in Bengaluru and the National Capital Region compared with 2025, while Hyderabad and the remaining markets remained broadly stable. Lower borrowing costs following the RBI’s cumulative rate cuts are expected to continue supporting housing demand through the second half of 2026.
Knight Frank said housing affordability across India’s major cities improved steadily between 2016 and 2021 and received a further boost during the pandemic when the RBI reduced policy rates to record lows. Affordability deteriorated after the central bank raised the repo rate by 250 basis points between May 2022 and early 2023 to curb inflation. More recently, cumulative monetary easing has improved home loan affordability, although rising residential property prices have moderated these gains.
Published – July 05, 2026 06:49 pm IST
