In many large cities across the country, rent is becoming a significant portion of residents' monthly income. The highest rental burden is observed in Mumbai, Kolkata, and Hyderabad. According to the 2025 Asia-Pacific Housing Resilience Index from the Urban Land Institute, in Mumbai, an average of 53% of citizens' income goes towards housing rent, followed by Kolkata at 48% and Hyderabad at 47%.
In Delhi-NCR, this figure stands at 34%, while in Pune it is 32%. In Bangalore, Ahmedabad, and Chennai, the share of expenses for rent was 29%.
The rising cost of housing in metropolitan areas creates serious financial pressure on urban families. When a large part of the income is spent on rent, it can negatively affect family savings, spending on other necessities, and future financial plans. Sarika Shetty, CEO and co-founder of RentenPe, noted: 'Affordable housing now means not only the ability to find a home but also what percentage of a person's monthly income is spent maintaining that home.'
According to ULI data, the ratio of rent to income varies across different major cities. This disparity indicates that the pressure of housing costs on families can vary greatly depending on the city, and government consumer data also underscores the important role of rent in urban family expenditures. In urbanized India, the share of rent in per capita consumer spending was about 6.58%, which is a substantial part of non-taxable expenses.
Nevertheless, one cannot judge a family's complete financial situation solely based on the rent-to-income ratio; factors such as income, family size, other expenses, and savings also play a crucial role.
For understanding housing affordability, data related to rent payments is also useful. These include the rent-to-income ratio, timeliness of payments, payment delays, and changes in rental burden over time. For example, if a person pays rent of ₹40,000–₹50,000 monthly, this represents a regular financial obligation. If they consistently and timely meet this obligation, it can serve as an additional indicator of their financial behavior. However, such signs should be viewed as supplementary information, not an alternative to traditional credit scoring.
It is also important to consider how much income remains after paying rent. Samujwal Ghosh, Associate Director at NK Realtors, believes that housing affordability assessment should be based on the amount left with the family after covering housing costs. He emphasized that when rent consumes 30% or more of the income, it can affect the standard of living, financial security, and future aspirations of the family. In his view, simply looking at the rent price is insufficient to deem a home affordable; one must consider the income, location of the home, commute time, infrastructure, and family priorities.
Thus, amid the growing demand for rentals in urban areas, it becomes clear that merely knowing the rent amount is not enough to determine a family's true housing affordability. Real affordability is determined by how much money remains after paying rent, as well as the family's other expenses. Consequently, the rental burden and tenant behavior can provide an additional perspective for understanding urban housing affordability and family financial solvency.