A Simple Way to Measure Home Affordability
A recent study looked at how affordable homes have become in eight major Indian cities over the last 15 years. The cities included Ahmedabad, Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune. The study compared data from 2010, 2015, 2020, and 2025.
The main measure used was the house price to income ratio.
This compares the average price of a 1,000-square-foot home with the average yearly income of a person in that city. A lower ratio means people need fewer years of income to buy a home, making housing more affordable.
Delhi NCR Shows a Big Change
Delhi NCR is one of the best examples of this trend. Around 2010, the average yearly income was close to ₹1 lakh to ₹1.25 lakh. At that time, the average price of a 1,000-square-foot flat was about ₹63 lakh. This meant a home cost nearly 63 times the average yearly income.
By 2025, the average yearly income had increased to around ₹5.5 lakh. At the same time, the same type of home was valued at around 28 times the average annual income. This shows a big improvement in affordability compared to 15 years ago.
Most Cities Have Improved
The same pattern can be seen in many other cities. In Ahmedabad, the house price to income ratio dropped from 43 times in 2010 to 19 times in 2025. Bengaluru also showed a major improvement, falling from 44 times to 20 times during the same period.
Hyderabad did not see as much change, but many of the other cities in the study also became more affordable. In most places, the number of years of income needed to buy an average home has gone down sharply.
Luxury Homes Tell a Different Story
It is important to understand that this study is based on the average price of a 1,000-square-foot home. Luxury apartments and premium projects can still be very expensive and may not follow the same trend.
Because of this, people looking only at high-end properties may feel that home prices have become impossible to afford. However, the average market tells a different story.
The Data Challenges a Common Belief
Many people believe that buying a home has become completely out of reach. However, this long-term data shows that incomes have also increased along with home prices. As a result, the average home now costs fewer times the average yearly income than it did 15 years ago.
This does not mean every home is cheap or that every buyer can easily purchase a property. But the numbers suggest that, in many major cities, home affordability has improved over time. Looking at both income growth and home prices together gives a more complete picture of the housing market.
