Mumbai Dec 28 (IANS) Ahmedabad, Pune and Kolkata are the country’s most affordable cities for home buyers while Mumbai continues to be the most expensive followed by Hyderabad, according to the latest Affordability Index report by real estate consultancy firm Knight Frank India.
Ahmedabad tops the list of affordable housing markets with an EMI to income ratio for households at 21 per cent.
In simple terms this means that an average household in Ahmedabad would need to spend 21 per cent of its income to pay the EMI for a home loan.
The next most-affordable housing markets are Pune and Kolkata both of which have an EMI to income ratio of 24 per cent.
The most expensive residential market in the country, Mumbai, saw an improvement of 2 percent in its affordability index measured at 51 percent in 2023 from 53 percent in 2022.
Hyderabad remained the second most expensive residential market in the country with its affordability index unchanged at 30 per cent for both 2023 and 2022 while the city’s home prices increased by 11 percent in 2023.
The National Capital Region (NCR) recorded an improvement in its affordability to 27 per cent in 2023 from 29 per cent in 2022.
Bengaluru is the fourth most expensive market with an affordability index of 26 percent in 2023. The ratio of the city has improved marginally by 1 per cent since 2022 and 6 per cent from the pre-pandemic year of 2019.
“While marginally better than last year, home affordability across cities also significantly improved since pre-pandemic year of 2019. And expected moderation in inflation and projected downward trend in interest rates should further improve home affordability in 2024,” the report states.
The report added that after a brief decline in affordability in 2022, the Equated Monthly Installment (EMI) to income ratio for households has improved in 2023.
“Anticipating stable GDP growth and moderation in inflation in FY 2024-25, affordability is expected to strengthen. Further, if the RBI decides to lower the repo rate later in 2024 as is widely expected leading to a reduction in home loan interest rates, the affordability of homes in 2024 could see further improvement,” Shishir Baijal, Chairman & Managing Director, Knight Frank India, said.