Home affordability improves in Hyderabad

Hyderabad: Home affordability ratio in Hyderabad improved from 53 per cent in 2012 to 29 per cent in 2021 as per a report. All markets, except Mumbai, are recorded to be well below the threshold of affordability set at 50 per cent ratio. Indian markets are at their decadal best in terms of housing affordability, says Knight Frank's Affordability Index 2021. According to the global property consultant's annual study, Ahmedabad emerged as the most affordable housing market in the country with an affordability ratio of 20 per cent followed by Pune and Chennai at 24 per cent and 25 per cent respectively in 2021. Mumbai was the only one that recorded higher than threshold affordability ratio at 53 per cent. However, it has improved the most since 2011.

Knight Frank's proprietary Affordability Index tracks the EMI (equated monthly installment) to total income ratio for an average household, has shown a meaningful improvement in affordability since 2010. Despite the pandemic period since early 2020, which has created disruptions in household incomes, housing affordability has further improved.

Decline in house prices and multi-decade low home loan interest rates have helped improve housing affordability in 2021. Shishir Baijal, CMD of Knight Frank India said, "Over the last decade housing market has undergone a structural transformation on both demand as well as supply side. This has made the environment for home buying relatively attractive and safe."

"However, the key catalyst remained the - affordability, which has witnessed gradual improvement since 2015. For most part of the last 5-6 years residential prices corrected leading to better affordability, however, the recent reduction in home loan interest rate to below 6.5 per cent has been a deciding factor in the significant improvement in home affordability in the last 24 months," he added.