Calcutta has maintained its position as the most affordable market among homebuyers across major markets in India, a study by international property consultancy JLL said, underlining tepid real estate price growth amidst a moderate growth in income levels.

The JLL Home Purchase Affordability Index (HPAI) puts the city’s affordability at 203 by the end of the year, up from 196 in 2023. In contrast, home affordability is likely to worsen in Delhi-NCR and Bengaluru, but improves in Mumbai, Pune, Chennai and Hyderabad, the study showed.

Mumbai continued to remain the most unaffordable among major cities with an index value expected at 92 by the end of the year, followed by Delhi-NCR at 111.

The index signifies whether a household earning an average annual income (at an overall city level) is eligible for a housing loan on a property in the city, at the prevailing market price. A value of 100 means that a household has exactly enough income to qualify for the loan. Going by this method, households in Calcutta have twice the income to qualify for a home loan.

For the analysis, JLL has considered an average of 1,000 square feet as apartment size, loan tenure of 20 years.

A close look at the residential price index, considered by the consultancy, may explain why the city remains a sweet spot, comparatively, among homebuyers. Indexed at 100 in 2011, the residential prices reached only 140 in 2024. In contrast, the residential price index doubled in Hyderabad, Bengaluru and Delhi-NCR.

While the real estate price growth underperformed all major cities covered by JLL in India, Calcutta stood a modest fourth in household income growth between 2011 and 2024.

Going into 2025, JLL predicts home purchase affordability will improve in all major cities and sales to rise to 350,000 units compared with 310,000 units in 2024. A key factor in this positive outlook is the anticipated shift in monetary policy. It assumes a 15-basis point interest rate drop factoring in a 25 bps repo rate by the RBI in December.

“JLL’s HPAI shows that while 2021 saw peak affordability across all markets, rising prices and sticky interest rates caused affordability levels to dip through 2022 and 2023. The anticipated interest rate reduction, combined with moderate price growth and sustained income increases, are expected to create a conducive environment for home purchases over the next 12-18 months with affordability levels set to improve to their best since 2022 for all cities, barring Bengaluru and Delhi NCR,” Samantak Das, chief economist and head of research & REIS, JLL, said.