Survey Claims Housing Affordability Improving Across India

PUNE: In a recently concluded study by Knight Frank India, Mumbai showed maximum improvement in affordability since 2010 while Kolkata, Ahmedabad and Pune have shown improved markets in terms of affordability since 2010 and apartment prices here stand at just 3 times of their average household incomes.

The report evaluates top eight markets of India, to assess the affordability of homes, and notes that affordability in other cities including National Capital Region (NCR) and IT Hubs of Bengaluru and Hyderabad have also seen an improvement.

Knight Frank’s proprietary Affordability Index examines the house price to income at a given period of time. Ideal affordability is identified at 4.5 times the average annual household income in a city. Except for Mumbai (7), NCR (5) and Hyderabad (5), all other the markets are below the 4.5 affordability benchmark. Mumbai, while still recording a high ratio of 7, has experienced the sharpest improvement since 2010.

Shishir Baijal, chairman and managing director, Knight Frank India in a statement said that a decline in average ticket size and focus on affordable housing have improved home affordability across the country to a large extent. “The fact that affordability statistics have moved dramatically since 2010 explains why sales have finally improved in 2018.”

Structural reforms have played a significant role such as Benami Transactions (Prohibition) Amendment Act, 2016 and demonetisation of high value currencies, along with Real Estate (Regulation and Development) Act (RERA), 2016 and Credit-Linked Subsidy Scheme (CLSS), the Pradhan Mantri Awas Yojana (PMAY), a scheme that aims to ensure 20 million affordable homes by 2022 have helped the sector.

Source: ToI

Image Courtesy: UNDP in India