Hyderabad Becomes India's Second Most Expensive Residential Market In 2024: Knight Frank Report

Hyderabad has emerged as the second most expensive residential market in India, according to the latest Affordability Index report by Knight Frank India. The city’s affordability ratio, which measures the proportion of income required to cover home loan EMIs, stood at 30 per cent in the first half of 2024, maintaining the same level as in 2023.

In contrast, Ahmedabad remains the most affordable housing market among India’s top eight cities, with an affordability ratio of 21 per cent, followed by Pune and Kolkata at 24 per cent each. Mumbai, however, continues to exceed the affordability threshold with a ratio of 51 per cent, making it the least affordable city.

Over the years, Hyderabad's affordability index has seen significant shifts. In 2010, the ratio was as high as 47 per cent, gradually decreasing to 34 per cent in 2019, and further to 31 per cent in 2020. The lowest recorded ratio was 28 per cent in 2021, after which it stabilised at 30 per cent in the subsequent years, including the first half of 2024.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, emphasised the importance of stable affordability in sustaining homebuyer demand and sales momentum, which are critical drivers of economic growth. He highlighted that as income levels rise and economic growth strengthens, homebuyers’ financial confidence improves, leading to increased long-term investments in real estate.

“Given the RBI’s healthy 7.2 per cent GDP growth estimate for FY 2025 and a stable interest rate scenario, income and affordability levels are expected to continue supporting homebuyer demand in 2024,” Baijal stated.

The report also revealed a consistent rise in property prices in Hyderabad. The weighted average price per square foot was Rs 2,728 in 2010, which increased to Rs 4,500 by 2019. By the first half of 2024, prices had climbed to Rs 5,681, marking a 26 per cent increase since 2019 and a 5 per cent rise compared to the first half of 2023.

The Affordability Index across leading Indian cities has shown considerable variation over the years. In Hyderabad, the index decreased from 47 per cent in 2010 to 34 per cent in 2019, further declining to 31 per cent in 2020, and reaching its lowest at 28 per cent in 2021, before stabilising at 30 per cent from 2022 through the first half of 2024. Mumbai, consistently the least affordable, saw its index drop from a staggering 93 per cent in 2010 to 67 per cent in 2019, then to 61 per cent in 2020, and settling at 51 per cent by the first half of 2024.

The National Capital Region (NCR) experienced a decrease from 53 per cent in 2010 to 34 per cent in 2019, with some fluctuations leading to 28 per cent by H1 2024. Bengaluru's index fell from 48 per cent in 2010 to 32 per cent in 2019, eventually reaching 26 per cent by H1 2024. Similarly, Chennai saw a drop from 51 per cent in 2010 to 30 per cent in 2019, with a slight rebound to 27 per cent in 2022, settling at 25 per cent in H1 2024.

Pune’s affordability improved from 39 per cent in 2010 to 29 per cent in 2019 and stabilised at 24 per cent by H1 2024. Kolkata followed a similar pattern, dropping from 45 per cent in 2010 to 32 per cent in 2019, and settling at 24 per cent by H1 2024. Ahmedabad emerged as the most affordable city, with its index decreasing from 46 per cent in 2010 to 25 per cent in 2019, further dropping to 21 per cent by the first half of 2024.