New Delhi real estate market in Delhi is the best in terms of home affordability, Indian property markets in their best decadal in terms of residential affordability, where all cities, except Mumbai, have been recorded as far below the threshold of affordability in the ratio of 50%, property advisor Knight Frank said in ‘affordability index 2021’.
Ahmedabad appeared the most affordable housing market in the country with a 20% affordability ratio followed by Pune and Chennai each of 24% and 25%, in 2021.
Mumbai was the only one who recorded higher than the ratio of the affordability threshold at 53%.
, This has increased most since 2011.
The ratio of affordability in Bengaluru increased from 57% in 2012 to 26% in 2021 while the ratio in the NCR increased from 38% by 2020 to 28% in 2021 the affordability index captured property price movements, interest rates for home loans and average household income to determine the ability of buyers to buy homes in certain cities.
Since the bank bears a home loan when the EMI ratio of income below 50%, the existing income and the average ticket size metric in seven of the eight markets allows home buyers to easily finance the purchase of their homes.
“For most of the 5-6 years the last housing price was corrected towards a better affordability, however, reducing interest rates of home loans recently below 6.5% has become a determining factor in a significant increase in the affordability of houses in 24 The last month in the last 24 months.
No doubt has taken a pandemic for the market to rotate the corner and lift the sentiment of home buyers, which are now proven throughout the country, “said Shishir Baijal, Chair and Managing Director, Knight Frank India.
Therefore, this is the right time for potential buyers to buy homes provided that all factors, in terms of regulatory environment, prices and interest rates are conducive home loans.
Note To Note: The Knight Frank’s affordability index shows the proportion of income needed by households, to fund monthly installments (EMI) from housing units in certain cities.
So, the level of index of the frank knight affordability of 40% for a city implies that on the average, the household in the city needs to spend 40% of their income to fund Emi housing loans for the unit.
The EMI / income ratio of 50% is considered unreachable because it is a limit outside of which bank rarely bears a mortgage.