Mumbai has achieved its most favorable housing affordability rating in 15 years, but for most aspiring homeowners, the dream remains distant. While reduced home loan rates have improved affordability metrics, the actual accessibility to homeownership continues to challenge even high-income urban households.
A closer examination of affordability trends, property prices, and income-to-loan ratios paints a sobering picture of Mumbai’s housing market. Though the numbers may appear promising on the surface, the ground reality tells a different story.
Affordability Index Hits Milestone, But Challenges Persist
According to Knight Frank India, Mumbai’s average home loan EMI to income ratio has dropped to 48%, falling below the crucial 50% affordability threshold for the first time since the index began. Despite this improvement, the financial burden of homeownership remains significantly high when compared to other Indian metros.
As per a National Housing Bank (NHB) analysis, even the top 5% of Mumbai’s urban households would need over 109 years of savings to afford an average-priced home without financial assistance—an indicator of just how far real affordability lags behind.
What Is Considered ‘Affordable Housing’ in India?
The Government of India defines affordable housing as:
- Carpet area up to 60 sq. meters in metros and 90 sq. meters in non-metros
- Property value not exceeding ₹45 lakh
However, CREDAI (Confederation of Real Estate Developers’ Associations of India) argues that the ₹45 lakh cap is outdated and needs revision. They propose:
- Raising the cap to ₹75–₹80 lakh
- Applying 1% GST on under-construction homes priced up to this new cap
“Units of 60 or 90 sq meters are still being built, but they no longer fall under the ₹45 lakh limit due to price increases. Revising the definition will ease the GST burden on buyers,” said Shekhar Patel, CREDAI President.
What ₹45–₹50 Lakh Gets You in Mumbai Today
With skyrocketing land and construction costs, ₹45–₹50 lakh no longer secures much within Mumbai’s municipal limits. Here’s what that budget fetches:
- Within city limits: At best, a 1RK studio apartment in distant suburbs.
- In the MMR region: Buyers can explore 1BHK or compact 2BHK units in Mira Road, Virar, Thane, Panvel, Kalyan, and Dombivli.
- Beyond the fringe: Areas like Karjat, Titwala, Ambernath, and Neral offer slightly larger units.
Property Registration Trends: Where Are People Buying?
Data from Knight Frank India and the Maharashtra Government show a clear pattern in buyer behavior:
| Year | Total Properties Registered | Up to ₹2 Crore | ₹2–₹5 Crore | ₹5 Crore & Above |
|---|---|---|---|---|
| 2023 | 1.14 lakh | 82% | 12% | 4% |
| 2024 | 1.28 lakh | 78% | 15% | 5% |
This reflects the dominance of mid-segment housing and highlights the limited share of ultra-luxury purchases despite the city’s high prices.
Should You Buy a ₹2 Crore Home with a ₹3 Lakh Monthly Income?
Many dual-income households in Mumbai earn a combined ₹3 lakh monthly, but does that qualify them to buy a ₹2 crore apartment? Experts say no.
“With a 100% loan, the EMI on a ₹2 crore property would be ₹1.75 lakh, which is over 58% of the household income—financially unsafe,” says Viraj Modia, a Mumbai-based chartered accountant.
Instead, Modia suggests:
- Limit property value to ₹1–₹1.25 crore
- Ensure EMI does not exceed ₹1 lakh/month
- Keep enough buffer for savings, insurance, and living expenses
Quick Summary Table: Mumbai Housing Affordability Snapshot
| Metric | Value |
|---|---|
| Affordability Index (2025) | 48% income spent on EMIs |
| Previous Year (2024) | 50% income spent on EMIs |
| Years Needed by Top 5% Income Households to Buy Home | 109 years of savings |
| Affordable Housing Cap (Govt.) | ₹45 lakh |
| Proposed Cap by CREDAI | ₹75–₹80 lakh |
| Property Registrations in 2024 | 1.28 lakh |
| Share of ≤ ₹2 Cr Properties | 78% |
FAQ Section
Q1: Why is housing in Mumbai still unaffordable despite lower loan rates?
A: While loan rates have dropped, property prices remain extremely high, pushing EMIs out of reach for most households.
Q2: What is the government’s current definition of affordable housing?
A: Housing units priced under ₹45 lakh and measuring up to 60 sqm (metros) or 90 sqm (non-metros).
Q3: What kind of property can I get for ₹50 lakh in Mumbai?
A: Mostly 1BHKs in distant suburbs like Mira Road, Vasai, or even further out in MMR towns like Karjat and Titwala.
Q4: What percentage of Mumbai buyers go for homes under ₹2 crore?
A: Nearly 78% in 2024, showing strong demand in the mid-range segment.
Q5: Is it financially safe to buy a ₹2 crore home with a ₹3 lakh salary?
A: No. Experts advise limiting the EMI to 30–35% of income, suggesting a max property value of ₹1.25 crore.