A Tale of Two Cities — Affordable Dreams in Modern India
In late 2025, a fresh spotlight has turned to Ahmedabad and Hyderabad — not for glitzy luxury towers or sky-scraping skylines — but for something maybe far more meaningful: affordability. According to a recent report by Colliers India, these two Tier-1 cities have quietly emerged as the most accessible residential markets in India.
Imagine a standard 1,000-square-foot home — a modest but comfortable dwelling by Indian city standards. In 2010, for many aspiring homebuyers across India's metros, such a home seemed like a distant dream: the national "Price-to-Income (P/I) ratio" stood at a worrying 88.5.
Fast-forward to 2025 — a dramatic shift has occurred. Across major cities, affordability has improved. On average, the P/I ratio has dropped to 45.3. Among all the metros, Ahmedabad and Hyderabad stand out:
- Ahmedabad’s P/I ratio plummeted from 43.6 in 2010 to just 19.8 today.
- In Hyderabad, the drop is even sharper — from 25.6 in 2010 to a remarkable 16.3 in 2025.
What does that mean in everyday life? It means thousands of households now find buying a home genuinely within reach — not just for the wealthy elite, but for middle-class families, working professionals, first-time buyers.
What’s Driving the Shift: More Than Just Numbers
This isn’t just a story about falling relative prices — it’s about many pieces falling into place together.
📈 Wages Growing Faster than Walls
One of the biggest reasons behind the improved affordability is the growth in income. Over the past 15 years, average incomes in India have reportedly grown at a compound annual growth rate (CAGR) of nearly 10%, while housing prices rose at a more modest 5–7%. That simple gap — income climbing faster than property prices — has done wonders for the dream of owning a home.
🏦 Access to Credit + Favourable Lending
The post-pandemic environment brought historically low interest rates — and that helped. As lending became cheaper and more accessible, home loans surged. In fact, outstanding home loans ballooned from around ₹3 lakh crore in 2010 to over ₹30 lakh crore in 2025. Meanwhile, banks seem more confident — housing loans now make up roughly 17% of overall bank credit, up from about 10% fifteen years ago.
🌆 Urban Expansion, Balanced Growth & Infrastructure
Both Ahmedabad and Hyderabad have avoided some pitfalls common to mega-cities like uncontrolled centralization or sky-high city-core rates. Instead, growth has been more balanced — spreading into suburbs, new localities, fringes — aided by better infrastructure, connectivity, and decentralised development. This expansion means that homebuyers no longer need to pay a premium for “central city” convenience: peripheral and suburban areas offer value without compromising access.
Why This Matters — Especially Now
For decades, owning a home in a big Indian city often meant compromises — long commutes, tiny apartments, steep prices, strained finances. But today’s report signals something different. For middle-income earners, young professionals, small families — the dream of owning a home looks far more real again.
In a country where urban growth is often accompanied by eye-watering real estate inflation, the fact that two major Tier-1 cities still offer reasonable housing options is a breath of fresh air. It means hope: that rising incomes, steady development, and prudent policy can combine to restore balance in real estate.
For first-time buyers, it’s encouraging. For long-term investors, it’s meaningful — stability, affordability, and growing demand make these cities worthy of attention.
Looking Ahead: Can the Momentum Last?
The report from Colliers India suggests optimism remains, at least for now. With stable incomes, a supportive credit ecosystem, and expectations of softer interest rates (should inflation remain in check), affordability could continue to improve. But the path forward will need careful balance. Rising raw material costs, inflation threats, or unchecked demand could hurt affordability.
In cities like Ahmedabad and Hyderabad, the challenge will be to maintain the balance: grow — but not too fast; expand — but not at the cost of livability; build — but not just for premium segments.
Final Thought
For many Indians, home is more than bricks and mortar — it’s stability, safety, and a foundation for future generations. The story of Ahmedabad and Hyderabad rising as affordable housing havens is a reminder that — sometimes after years of struggle — the dream of home-ownership in India doesn’t have to be out of reach.
Reviewed by Aparna Decors
on
December 05, 2025
Rating:
