The cost of living in Indian cities has become a big concern. A recent report by Knight Frank India tells us that Mumbai is the most expensive city to live in. This report looks at how much of people's income goes towards paying home loans.
They use something called the Affordability Index, which compares how much people earn to how much they spend on home loans. In Mumbai, this number is really high at 55%. This means more than half of what people earn goes towards paying for their homes. This is tough for people who want to buy homes in Mumbai.
On the other hand, a city like Ahmedabad is much more affordable. In Ahmedabad, people only need to spend 23% of their income on home loans. This makes it easier for people to buy homes there.
The report also talks about how changes in interest rates affect how affordable homes are. The Reserve Bank of India increased interest rates, which made paying for homes harder. People who wanted cheaper homes had a harder time buying them because of these changes.
Interestingly, expensive homes didn't face as many problems. People still bought homes that cost between 50 lakh to 1 crore, and even more expensive ones above 1 crore. This shows that despite difficulties, wealthier people were still buying homes.
The person in charge of Knight Frank India said that the Reserve Bank of India's efforts to control inflation (the rise in prices) were helping the economy. He also warned that if interest rates go up more, it could make buying homes even harder.
To sum it up, the Knight Frank Affordability Index tells us that living costs are different in Indian cities. Mumbai is tough because people spend a lot on home loans, while Ahmedabad is easier on people's wallets. The report also teaches us that changes in interest rates affect how easy it is to buy homes. It's important for the government and others to make sure that buying homes is possible for everyone.
