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Hyderabad 2nd costliest housing market in India
Hyderabad 2nd costliest housing market in India
Ahmedabad is the most affordable residential mkt among top 8 cities, says Knight Frank India report
Hyderabad: Hyderabad is the second most expensive residential market among top eight cities in the country while Ahmedabad is the most affordable housing market in the country, says a report.Knight Frank Indiaon Friday released its Affordability Index report for H1 (January-June) 2022 that tracks the EMI (Equated Monthly Installment) to income ratio for an average household.
From 47 per cent in 2010, the home purchase affordability index of Hyderabad improved to 33 per cent in 2019. With the advent of the pandemic in early 2020, the affordability index further improved to 31 per cent in 2020 and again to 29 per cent in 2021. In H1 2022, the affordability index of the city currently stands at 31 per cent.
The property consultant pointed out that affordability of owning homes in terms of EMI to income ratio declined in the H1 of 2022 due to the Reserve Bank of India's decision to hike repo rates by 90 basis points (bps), which prompted banks and other financial institutions to increase home loan interest rate.
As per the data, Mumbai remains the most expensive residential market in the country. In H1 2022, the affordability index of the city increased to 56 per cent from 53 per cent in 2021. After Ahmedabad, Pune and Chennai are the second most affordable residential markets in the country, with a ratio of 26 per cent each in the H1 of 2022.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, "The home affordability, due to the rise in home loan rates by 90 bps, has worsened in the last couple of months. On an average affordability has decreased by 200-300 bps across the major markets. However, despite the hike in the rates, markets remain largely affordable."
With the positive change in sentiments towards home ownership, we expect demand to remain unhindered with the momentum backed by the latent demand in the market continuing. Further, factors like strong economic growth outlook, financial stability and job security, the purchasing capabilities of potential buyers are expected to remain intact," he added.
"In the last few years, capital values have remained stable across India or witnessed slight increase. However, during the same period income level has increased significantly, which has resulted in improved affordability," said Pankaj Pal, Group Executive Director, AIPL. While there is a slight increase in interest rate on home loans in the last couple of months, it is still below the comfortable levels of 8 per cent per annum, he said, adding, "We don't expect any impact on affordability". According to Trehan Group MD Saransh Trehan, affordability has been impacted slightly due to a rise in mortgage rates.
