Check the list of most affordable property rates of 2023
The increase in house loan interest rates has impacted the affordability of residential property in eight main cities in India.
On Wednesday, real estate consultant Knight Frank India published its Affordability Index data for the first six months 2023.
The index determines whether the Equated Monthly Instalment (EMI) to Income Ratio for an average family has increased or reduced and then reports the results.
The list of affordable property rates:
The Affordability Index seeks to measure the proportion of a household’s income needed to cover the monthly EMI of a housing unit in a specific city.
The values are calculated assuming a 20-year home loan, an 80% loan-to-value ratio, a fixed dwelling unit area, and a median housing price in that city.
So, a Knight Frank Affordability index rating of 40% for a place means that households in that city must spend 40% of their income to cover the average EMI of a housing loan.
According to the Knight Frank India research, an EMI/Income ratio of more than 50% is considered unaffordable because it is the maximum beyond which banks rarely underwrite a mortgage.
Ahmedabad — 23 per cent ratio
Pune — 26 per cent ratio
Kolkata — 26 per cent ratio
Bengaluru — 28 per cent ratio
Chennai — 28 per cent ratio
Delhi-NCR — 30 per cent ratio
Hyderabad — 31 per cent ratio
Mumbai — 55 per cent ratio
The report by Shishir Baijal:
According to Shishir Baijal, chairman and managing director of Knight Frank India, residential demand has been at a multi-year high.
In contrast, office demand has remained resilient despite the global circumstances. “The mid and premium segments of the residential market have consistently outperformed, indicating a significant shift in the market’s underlying fabric.”
However, the 250 basis point increase in policy rates has reduced affordability across markets by 2.5% on average. And, while the market has been solid thus far, further interest rate increases could put pressure on homebuyer ability and attitude.”
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