When rent eats 30% of income: India’s urban housing affordability squeeze deepens

Rent is consuming a substantial share of household income in several major Indian cities, with Mumbai, Kolkata and Hyderabad recording the highest rental burdens, according to the Urban Land Institute’s 2025 Asia Pacific Home Attainability Index.

The rising rent-to-income burden is prompting a broader debate on urban housing affordability, with tenant payment behaviour emerging as a potential measure of financial capacity.

Rental burden varies sharply across cities  

Rental affordability is emerging as a key pressure point for urban households as housing costs take up a significant portion of monthly incomes in several major cities. The ULI 2025 Asia Pacific Home Attainability Index shows that rental apartments absorb 53% of income in Mumbai, followed by 48% in Kolkata and 47% in Hyderabad.

The burden stands at 34% in Delhi NCR and 32% in Pune, while Bengaluru, Ahmedabad and Chennai each record a rental burden of 29%.

“Affordability is no longer simply about whether people can find a home, but about how much of their monthly income goes towards keeping one,” said Sarika Shetty, CEO & Co-founder, RentenPe.

The data also highlights how rental costs can shape household financial resilience. When a large share of income is committed to rent, households have less flexibility for savings, discretionary spending and other financial priorities.

Rent as a financial signal

Government consumption data also points to the significance of rental expenditure in urban households. According to the MoSPI Household Consumption Expenditure Survey (HCES) 2023-24, rent accounted for around 6.58% of monthly per-capita consumption expenditure in urban India, making it a significant component of non-food spending.

However, conventional measures of housing affordability do not always capture the financial behaviour associated with rental payments. Tenant-payment data can provide information on rent-to-income ratios, payment consistency, delays and changes in rental burdens over time.

For instance, a tenant paying ₹40,000-₹50,000 in monthly rent represents a recurring financial obligation. Regular payment of such obligations could potentially provide an additional signal of financial behaviour that may not be captured fully by traditional credit assessments.

Affordability beyond the rent cheque

Samujjal Ghosh, Associate Director, NK Realtors, said affordability should be assessed by what a household is left with after paying for its home.

“When rent consumes 30% or more of income, it affects quality of life, financial resilience and aspirations,” Ghosh said.

He added that affordability needs to be assessed alongside factors such as income, location, commute time, infrastructure and household priorities, rather than looking at rent in isolation.

As rental housing becomes an increasingly important part of urban living, tenant payment behaviour could therefore offer another lens through which affordability and financial capacity are assessed.