Home Affordability improve across Indian cities in 2023: Knight Frank India
The EMI (Equated Monthly Instalment) to income ratio for households has improved in 2023 after the brief decline in affordability in 2022, according to Knight Frank India’s proprietary Affordability Index.
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.
Ahmedabad remains the most affordable housing market in the country with an affordability ratio of 21%, which implies that on an average a household in Ahmedabad needs to spend 21% of its household income to pay EMI for housing loans. Ahmedabad was followed by Kolkata and Pune at 24% each in 2023.
Kolkata comes second on Knight Frank’s affordability index with a ratio of 24% in 2023. The ratio level of the city has improved by 1% from 2022 and by 8% from the pre-pandemic year of 2019.
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Mumbai is the only city beyond the affordability threshold of 50%, a level exceeding which banks rarely underwrite a mortgage. The most expensive residential market of the country, Mumbai, has however seen an improvement of 2% in its affordability index measured at 51% in 2023 from 53% in 2022. Looking at the trend from the pre-pandemic period, the city has witnessed a significant improvement of 16% in its affordability levels from 67% in the 2019.
Hyderabad is the second most expensive residential market in the country. The affordability index of the city remained unchanged at 30% for both the years of 2023 and 2022 as home prices increased by a prolific 11% in 2023.
National Capital Region (NCR) has
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