Mumbai has been ranked as the most expensive city to live in India, as per a news report released by leading property consultant Knight Frank India.
The affordability index released by Knight Frank measures living affordability based on the EMIs a resident in that city has to pay if they get a house with a home loan divided by the total income of an average household in that city, reports NDTV.
The Knight Frank Affordability Index indicates the proportion of income that a household requires, to fund the monthly installment (EMI) of a housing unit in a particular city.
So, a Knight Frank Affordability index level of 40% for a city implies that on average, households in that city need to spend 40% of their income to fund the EMI of housing loan for that unit, reports the Indian news channel.
An EMI/Income ratio over 50% is considered unaffordable as it is the limit beyond which banks rarely underwrite a mortgage.
The most expensive housing market is Mumbai.
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.
As per the survey, the next most expensive city in India is Hyderabad.
The survey showed the most affordable city to live in India is Ahmedabad.