Affordability Index: For many aspiring homeowners in India's bustling metropolises, the dream of owning four walls of their own has long felt like a distant mirage shimmering in the heat. But a recent report from Knight Frank India painted a surprisingly optimistic picture, suggesting that the dream is finally within reach for many.
According to the Knight Frank Affordability Index, the EMI-to-income ratio for households across major Indian cities has improved significantly since 2019 and, even improved from last year's performance. Indicating that the monthly chunk of income going towards mortgage payments has shrunk, making homeownership a more realistic proposition for a larger segment of the population.
Shishir Baijal, Chairman & Managing Director, Knight Frank India, said, “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 a noteworthy enhancement, providing a comprehensive boost to the sector." Hyderabad retained its position as the second most expensive residential market in the country, with an unchanged affordability index of 30 per cent for both 2023 and 2022.
This stability came despite a notable 11 per cent surge in home prices in 2023. The National Capital Region (NCR) observed an improvement in its affordability index, decreasing from 29 per cent in 2022 to 27 per cent in 2023.
Bengaluru secured the fourth position in terms of expenses, with an affordability index of 26 per cent in 2023. While the ratio saw a marginal improvement of 1 per cent since 2022, it
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