Mumbai- the bustling city, popularly known as the “Mayanagri ” has earned another distinction of being the most expensive city to live in. The report was compiled and released by a leading International Property Consultant Knight Frank India. According to the report, Ahmedabad city in Gujarat is the most affordable city to live in.
The city of Mumbai is economically crucial for India. Its contribution is the highest to the Indian GDP. Thus, it is home to billions of Indians which is where the issue of housing, traffic, and congestion comes from. The affordability of houses is being scrunched between achieving economic growth and the well-being of its residents. Demand for workforce clashes with the issue of their quality accommodation.
The government has made some strides in trying to tackle the issue. One such attempt was the flagship “Housing for All by 2022” which played an essential role in reducing house prices, thereby making them affordable. In order to better understand the global housing affordability crisis, Knight Frank India developed the Global Affordability Monitor. The mechanism evaluates 32 leading cities worldwide on three parameters.
What makes Mumbai the Most Expensive?
Mumbai has the most expensive housing market in India. As reported, the city’s home loan EMI to income ratio is an astonishing 55 percent. This means that an ordinary family spends more than half of its income on mortgage payments in Mumbai. According to another comparison, average house prices are seven times the average household income. The financial burden of owning a house in Mumbai is highest in comparison to other Indian cities.
These statistics highlight the grave situation of the housing market in Mumbai. As India becomes the fastest growing economy in the world, many big companies have set up their bases to take its benefit. This has caused widespread urbanisation with the emergence of the middle-class population. And hence, increased the demand of the housing market. Owning a house is a symbol of stability and achieving social status in India. The fervor for owning a property is driving its prices skyward. Even a small house in Mumbai costs a fortune.
Who Else is on the List?
Similar is the case in other cities on the list. The second most costly city is Hyderabad. The city hosts a robust IT industry while having an EMI-to-income ratio of 33%. The national capital New Delhi ranks in the third position where a home loan costs 30% of your salary. Chennai and Bengaluru in Tamil Nadu have an equal EMI-to-income ratio of 28%. Pune in Maharashtra and Kolkata in West Bengal also have the same ratio of 26%. At last, Ahmedabad has the lowest EMI-to-income ratio of 23%. It comes out as the most affordable city to live in.
It is easy to decipher from the above data that the most economically advanced cities are the ones with the costliest housing markets. Individuals from across India are internally migrating to big cities in search of better education and jobs. This influx of people to metro cities, which is expected to rise further, is the major reason for skyrocketing housing prices. A steep hike can also be seen in rents.
Knight Frank India has set an affordability benchmark for housing which is 4.5 times the average annual income of a household. This remains a goal to achieve for the cities of Mumbai, Hyderabad, and New Delhi.
