Mumbai Tops The List of Most Expensive Cities of India! Which Ones Are Affordable?
Mumbai, the financial capital of India, has been ranked as the most expensive city to live in India. The city beat out Delhi, the national capital, to the top spot. The ranking is based on the Knight Frank Affordability Index, which measures the cost of living in a city based on the EMIs (equated monthly installments) that a resident would have to pay if they took out a home loan. As the threshold beyond which banks rarely underwrite a mortgage, an EMI/Income ratio of more than 50% is seen as unaffordable. For Mumbai, the home loan EMI to income ratio is a whopping 55%, meaning that an average household has to pay more than half of its income on home loan EMIs if they have to get a house on loan. This is significantly higher than the EMI-to-income ratio in Delhi, which is 30%.
The high cost of living in Mumbai is due to a number of factors, including the high demand for housing, the high cost of transportation, and the high cost of education. Mumbai is also a very crowded city, which adds to the cost of living. The high cost of living in Mumbai can make it difficult for people to afford to live in the city. This is especially true for low-income earners and people who are new to the city. There are a number of government programs that help people to afford to live in Mumbai, but these programs are often not enough.
The high cost of living in Mumbai is also a challenge for businesses. Businesses have to pay higher wages to attract and retain employees, and they also have to pay higher costs for transportation and other expenses. This can make it difficult for businesses to compete in the global economy. The second most costly city is Hyderabad, with an EMI to income ratio of 31%. The third-placed region is the Delhi National Capital Region, where home loan EMIs cost 30% of your salary. With an EMI to income ratio of 28%, Chennai and Bengaluru in Tamil Nadu tie for fourth place. Next, an ordinary household in Pune, Maharashtra, must pay home loan EMIs equal to 26% of their income. In West Bengal, Kolkata has the same rate.
And in the end, the most affordable Indian city to live in is Ahmedabad in Gujarat where an average household needs to pay 23% of its income for home loan EMIs. This index has assumed a loan term of 20 years, a loan-to-value ratio of 80% and a fixed house size across cities. Indore and Jaipur also turned out to be affordable cities based on this index.
