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Mumbai most expensive housing market in the country; Ahmedabad most affordable: Report

The cumulative 50 bps rate hike by the RBI has decreased home purchase affordability on an average by 2 percent across markets and increased EMI load by 7.4 percent

October 11, 2022 / 15:46 IST
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Mumbai is the only city that witnessed the affordability index improving at the rate of 4 percent from 53 percent in 2021 to 57 percent in Q3 2022.

Mumbai is the most expensive residential market in the country followed by Hyderabad and Delhi-NCR. Ahmedabad continued to remain the most affordable housing market amongst the top eight cities, with a ratio of 22 percent followed by Pune at 26 percent and Chennai at 27 percent, said Knight Frank India’s Affordability Index for Q3 2022.

The cumulative 50 bps rate hikes by the Reserve Bank of India (RBI) have decreased home purchase affordability on an average by 2 percent across markets and increased EMI load by 7.4 percent, it said.

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All markets have seen a decline in affordability following the recent rise in median loan rates as a result of the 50 bps rise in REPO rates. The 0.95 percent cumulative increase in median home loan rate will impact affordability of homebuyers and thus their purchase decisions as well, it noted.

The affordability index tracks the EMI (equated monthly instalment) to income ratio for an average household. It witnessed steady improvement from 2010 to 2021 across the eight leading cities of India especially during the pandemic when the RBI cut REPO rates to decadal lows.