Buying a home in a metro city has long been an aspiration for millions of Indian families. Rising property prices and high borrowing costs often made this dream unattainable, particularly for the middle-income group. In 2025, however, a combination of policy changes and economic developments has shifted the scenario. With the Reserve Bank of India cutting the repo rate by 100 basis points since February, home loan EMIs have become lighter, enabling households to commit a smaller proportion of income to housing finance. Alongside lower interest rates, income growth and urban infrastructure upgrades have collectively made select metro cities more accessible for homebuyers.
The Knight Frank Affordability Index for the first half of 2025 shows that Ahmedabad, Pune, and Kolkata are the three most affordable metro housing markets in India. The index measures the proportion of a household’s income required to service EMI on a home loan. A ratio below 40 percent is considered healthy, while anything above 50 percent is unsustainable. Ahmedabad, Pune, and Kolkata stand comfortably below this threshold, making them the top choices for value-driven buyers.
Ahmedabad: India’s Most Affordable Metro
Ahmedabad continues to be the most affordable metro city in India, with an EMI-to-income ratio of just 18 percent , the lowest among all major metros. Despite being a tier-1 market, property values remain modest compared to hotspots like Pune, Hyderabad, or Bengaluru. The city’s economy, bolstered by its strong base in textiles, oil and gas, electricity, and pharmaceuticals, provides stable employment and income support for its residents.
The cost of living is also lower than in most metros, which makes disposable income more resilient. Upcoming projects such as the expansion of its metro rail network and the modernization of arterial roads are further improving accessibility and livability.
Three major buyer categories dominate Ahmedabad’s housing market:
- First-time homebuyers from salaried families who prioritize affordability
- Investors betting on long-term appreciation and rental demand
- Local residents looking for a balance between cultural heritage and modern urban facilities
For all these groups, Ahmedabad remains an outlier: a city where middle-class households can still purchase homes without stretching their financial limits.
Pune: Balancing Growth, Lifestyle, and Affordability
Pune, with an affordability ratio of 22 percent, is another metro where homebuyers see a favorable mix of job opportunities and reasonable housing costs. The city’s growth is powered by its dual engines — IT services and higher education, supplemented by a strong base in manufacturing and start-ups.
Despite being one of India’s fastest urbanizing cities, Pune has managed to remain accessible compared to bigger metros like Mumbai or Delhi. Residential growth corridors such as Hinjewadi, Wagholi, Kharadi, and Ravet have seen steady supply, driven by township developments and metro connectivity projects. These areas attract professionals from the technology and services sectors, along with families drawn by Pune’s educational ecosystem.
For investors, Pune’s housing market has been particularly appealing, due to consistent demand from migrants and young professionals who prefer renting closer to employment hubs. The steady absorption of housing stock, combined with moderate price appreciation, makes Pune a relatively low-risk market for long-term buyers.
Kolkata: Spacious Homes at Modest Prices
Kolkata rounds off the top three affordable metros, with an affordability ratio of 25–26 percent. While it has not experienced the same pace of economic transformation as Pune or Hyderabad, it offers something unique: larger homes at lower costs. Developers are able to deliver spacious housing projects due to relatively lower land and construction expenses, making Kolkata one of the best value-for-money propositions in metro housing.
The city continues to attract households looking for ownership in established neighborhoods, rather than speculative investment in far-off corridors. Its cultural identity, deep-rooted communities, and stable demand patterns ensure a balanced housing market.
Although infrastructure expansion has been slower compared to western and southern metros, ongoing projects, such as extensions of the metro rail and improved road connectivity — are gradually adding to its long-term growth story.
Mixed Trends in Other Metros
While these three metros shine on affordability, the picture elsewhere is mixed:
- Bengaluru, Hyderabad, and Chennai: These cities maintain moderate affordability, with EMI-to-income ratios in the high twenties. Strong tech-led economies support income growth, but rising land costs and speculative investment have started to put pressure on prices.
- National Capital Region (NCR): Affordability has worsened here, with the ratio climbing to 28 percent, largely due to sharp property price increases that outweighed the benefit of lower loan rates.
- Mumbai: Still India’s costliest housing market, Mumbai recorded a symbolic improvement by slipping below the 50 percent threshold for the first time. However, the shift has been driven almost entirely by reduced borrowing costs, not by property price corrections.
Why These Cities Remain Affordable?
- Ahmedabad, Pune, and Kolkata share structural strengths that underpin their affordability:
- Property prices remain lower compared to overheated tier-1 markets
- Transport and metro projects are expanding accessibility without causing massive spikes in land costs
- Economic diversity — from IT and education to heavy industry and textiles — provides stable employment bases
- Lower living expenses compared to metros like Mumbai or Delhi help maintain healthier EMI-to-income ratios
These factors, coupled with the RBI’s accommodative stance, create an environment where families can buy homes without excessive financial stress.
Outlook for 2025 and Beyond
Industry analysts expect residential property prices to grow by 6.5 percent in 2025 and 7.5 percent in 2026, reflecting continued demand momentum. While this suggests that affordability could tighten marginally, the impact may be offset if income levels rise in tandem and borrowing rates remain supportive. Developers are also pivoting toward mid-income housing segments, anticipating stronger demand from first-time homebuyers.
Key risks to watch include inflationary pressures, which could erode disposable incomes, and any reversal in RBI’s interest rate trajectory. Rising construction costs, driven by materials and labor, also remain a concern for developers and buyers alike.
In 2025, affordability has become a defining factor in metro housing markets, reshaping buyer sentiment and sales momentum. Ahmedabad leads the way with the lowest EMI burden, Pune balances economic growth with accessibility, and Kolkata offers spacious homes at modest costs. For homebuyers and investors alike, these cities provide the best entry points into India’s metro housing market, supported by economic stability, policy backing, and infrastructure growth.
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