Ahmedabad most affordable housing market, Mumbai costliest

New Delhi: Housing segment of the realty industry is proving to be lucrative for buyers, with the affordability ratio improving in the metropolitan cities across the country. Tier 1 cities such as Hyderabad, NCR region, Pune, Bangalore, Ahmedabad, Chennai and Kolkata have all registered a dip in threshold of affordability set at 50 per cent ratios.

According to a report submitted by realty observer Knight Frank, Ahmedabad emerged 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 percentage respectively in 2021. Affordability ratio in Hyderabad too, have improved from 53 per cent in 2012 to 29 per cent in this year.

Shishir Baijal, Chairman and Managing Director, 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."

He further explained that correction in residential prices has led to better affordability, along with complimentary factor of reduced home loan interest rate which is below 6.5 per cent is the significant improvement in home affordability in the last 24 months. No doubt it has taken a pandemic for the market to turn the corner and lift homebuyer sentiment, which is now evident across the country."

The report, namely, Affordability Index 2021, has also recorded that Mumbai's residential market is the only one which recorded higher than threshold affordability ratio at 53 per cent, however, it has improved the most since 2011. In the previous year, Mumbai had recorded an affordability ratio of 60 per cent. The Affordability Index is calculated by tracking the EMI (Equated Monthly Instalment) to total income ratio for an average household.