Affordability across various Indian cities
The Knight Frank Affordability index that tracks EMI to income ratio has decreased across all cities in 2022.The 225 bepo rate increase and consequent increase of mortgage rates are primary drivers among this decline.
However all markets expext Mumbai saw a index of less than 50%,a level exceding banks rarely underwrite a mortagage.Ahmedabad emerged as the most affordable with a 22% which implies on average an household spends 22% of it’s income on home loan.It is followed by Pune and Kolkata at 25% .
While affordability across major cities has drastically decreased over 2010 levels,they have also increased from pre pandemic levels with both Delhi and Bengaluru a decrease from 34% in 2019 to 29% in 2022 and 32% to 27%.No significant increase in housing prices from 2021 with 7% -4 % across cities,could contribute to lower housing costs despite a rapid increase of cost of raw materials.
The government’s efforts towards more affordable housing ,rising living standards can be attributed to more affordable living.The sales in 2022 in premium,mid segment have risen and occupied more share in total sales when compared to 2021.Even with this increase decrease in affordability shows India’s focus overall on housing for all.