Hyderabad is the third most expensive housing market in India

Hyderabad households need to spend 41 per cent of their income towards home loan EMIs, according to Knight Frank India.

Hyderabad: Hyderabad remains the third most expensive residential market among the country’s top eight cities, with households needing to spend 41 per cent of their income towards home loan EMIs, according to property consultant Knight Frank India’s Affordability Index for the first half of 2026.

The index, which measures the proportion of household income that goes into servicing the equated monthly instalment (EMI) of a housing unit, showed that affordability in Hyderabad has stayed largely unchanged compared with the end of 2025, when the ratio also stood at 41 per cent.

Six of the eight cities tracked by the index remained within the affordability threshold of 50 per cent, a level beyond which banks typically become reluctant to underwrite home loans. The Mumbai Metropolitan Region and the National Capital Region (NCR), however, continued to stay above this mark, at 69 per cent and 67 per cent, respectively.

Ahmedabad most affordable, Mumbai least

Ahmedabad retained its position as the most affordable housing market among the top eight cities at 23 per cent, followed by Kolkata at 25 per cent and Pune at 28 per cent. Chennai stood at 29 per cent and Bengaluru at 35 per cent.

Affordability worsened marginally in Bengaluru and the NCR compared with 2025, the report noted, while other markets remained largely stable through the period.

The report traced how affordability had improved steadily between 2016 and 2021 and strengthened further during the pandemic as the Reserve Bank of India (RBI) cut rates to decadal lows, before deteriorating in 2022 when the central bank raised the repo rate by 250 basis points over nine months to tackle inflation.

Rate stability since early 2023 has helped hold affordability levels steady, even as rising property prices, particularly in the NCR, kept the ratio elevated in some markets. The RBI’s Monetary Policy Committee (MPC) held the repo rate at 5.25 per cent at both its February and June 2026 meetings, citing risks from the West Asia conflict on energy prices and uncertainty over monsoon conditions.

With FY27 GDP growth projected at 6.6 per cent and the consumer price index (CPI) forecast raised to 5.1 per cent, the report said near-term rate stability appeared to be the most likely scenario, even as the accumulated benefit of past rate cuts continued to support affordability in most markets.