Curated By: Business Desk
Last Updated: August 18, 2023, 10:38 IST
Knight Frank India, which is a leading property consultant, has released a new report. As per the recently published report, Ahmedabad is the most affordable Indian city to live in. The report also mentioned that Delhi-NCR is the sixth most affordable city in India. The ranking has been done on the basis of the affordability index.
The affordability index measures living affordability on the basis of the proportion of an individual’s income that goes toward making EMI payments in that city. It means that an affordability index level of 40% for a city implies that on average, a person living in the city needs to spend 40 per cent of their income to fund the EMI of a housing loan.
According to the report, Ahmedabad has an affordability index of 23 per cent, followed by Pune and Kolkata, both with a ratio of 26 per cent. Next to these cities is Hyderabad with a ratio of 31 per cent and Delhi-NCR with 30 per cent. Interestingly, Mumbai continues to be the most expensive city with a ratio of 55 per cent. It is followed by Hyderabad at 31 per cent.
Rajat Goyal, MD, MRG Group, said, “Buying a home in Delhi-NCR is not only cheaper than other cities in the country, but quality accommodation is also available here. Apart from real estate, all facilities from education to health are better available here. Because of this, NCR is the cheapest and best city. This is why new real estate projects are constantly being launched in Noida, Greater Noida, and Gurugram and the demand for houses is constantly increasing.”
Last year witnessed these cities only becoming more expensive. These EMI-to-income ratios across cities have increased by 1-2 percentage points. The reason behind this is Reserve Bank of India has increased its key lending rate by 250 basis points, thereby increasing the EMI load across cities.
Speaking about the sales of these houses, Shishir Baijal, Chairman and Managing Director, Knight Frank India, said that homebuyers looking for houses worth less than Rs 50 lakh have a much higher dependence on home loans. Adding that they are more sensitive to rate hikes than the mid and premium segments, he noted that sales in the mid-segment now comfortably exceed that of the affordable segment while those in the premium segment are catching up fast.
