Urban households in India are facing an escalating challenge as a substantial portion of their income is now being consumed by rent, according to the Urban Land Institute’s (ULI) 2025 Asia Pacific Home Attainability Index.
Rising Rental Burdens Across Key Cities
The ULI report highlights a deepening urban housing affordability crisis, with Mumbai, Kolkata, and Hyderabad experiencing the most significant rental burdens:
- Mumbai: Rent absorbs a staggering 53% of household income.
- Kolkata: Households spend 48% of their income on rent.
- Hyderabad: Rental costs account for 47% of income.
Other major cities also show considerable pressure:
- Delhi NCR: 34% of income goes towards rent.
- Pune: The burden stands at 32%.
- Bengaluru, Ahmedabad, and Chennai: Each records a rental burden of 29%.
Sarika Shetty, CEO & Co-founder of RentenPe, emphasized this shift, stating, “Affordability is no longer simply about whether people can find a home, but about how much of their monthly income goes towards keeping one.”
Impact on Financial Resilience
When a large share of income is committed to rent, households have significantly less flexibility for essential savings, discretionary spending, and other critical financial priorities. This can severely hinder long-term financial stability and quality of life.
Government data further underscores the importance of rental expenditure. The MoSPI Household Consumption Expenditure Survey (HCES) 2023-24 indicated that rent comprised approximately 6.58% of monthly per-capita consumption expenditure in urban India, marking it as a substantial non-food expense.
Beyond Traditional Affordability Metrics
The report suggests that conventional measures of housing affordability often fail to capture the nuanced financial behaviors associated with rental payments. Tenant-payment data, which includes rent-to-income ratios, payment consistency, and delays, could offer a more comprehensive understanding of financial capacity.
Samujjal Ghosh, Associate Director at NK Realtors, stressed that true affordability must consider what a household is left with after housing costs. “When rent consumes 30% or more of income, it affects quality of life, financial resilience and aspirations,” Ghosh noted. He advocated for assessing affordability alongside factors like income, location, commute time, infrastructure, and household priorities, rather than viewing rent in isolation.
As rental housing becomes increasingly central to urban living, insights from tenant payment behavior could provide a crucial new lens for evaluating both affordability and overall financial health.