Ahmedabad ranked as the cheapest housing property market in the nation, despite increasing interest rates on house loans and decreasing housing affordability throughout India’s top cities this year. According to Knight Frank India’s Affordability Index for 2023, Ahmedabad has the most affordable housing market among the top eight cities, with an Equated Monthly Instalment (EMI) to Income for an Average Household Ratio of 23%.
Kolkata and Pune landed in second place on the list of India’s most cheap housing markets with a 26% ratio.
Even during the Covid-19 epidemic, when the Reserve Bank of India (RBI) dropped repo rates to decadal lows, housing affordability continued to increase from 2010 to 2021 across the eight largest cities in India, the data indicated.
However, as the Russia-Ukraine war broke out last year and caused supply chain delays that boosted worldwide prices, things started to shift. The RBI increased repo rates by 250 basis points (bps) between May 2022 and February 2023 to combat inflation, which also raised the interest rates on home loans.
“This has increased the EMI load by 14.4% since then and reduced affordability by an average of 2.5% across cities. But demand has not diminished and has continued to rise to multi-year highs.
The percentage of the typical salary level that is used to pay house loan EMIs is used to compute the EMI to income ratio, also known as the affordability ratio.
The ratio is lower, the city is more cheap. According to the Knight Frank India Affordability Index, this ratio is far below 50% in all markets except Mumbai. This percentage is thought to be the cutoff for comfortable affordability. Mumbai’s EMI to income ratio, however, increased from 53% in 2022 to 55% in H1, 2023.
Despite rising to 30% in H1 2023 from 29% in 2022, the EMI to income ratio in the NCR region was substantially lower. According to the report, Bengaluru’s affordability ratio increased from 27% to 28% in H1 2023.
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The percentage of the typical salary level that is used to pay house loan EMIs is used to compute the EMI to income ratio, also known as the affordability ratio. The ratio is lower, the city is more cheap. According to the Knight Frank India Affordability Index, this ratio is far below 50% in all markets except Mumbai.
This percentage is thought to be the cutoff for comfortable affordability. Mumbai’s EMI to income ratio, however, increased from 53% in 2022 to 55% in H1, 2023. The NCR regulation.
