New homes turn more affordable

Buying a home is becoming easier with the increase in affordability due to lower ticket sizes and reduction in average area of residential units across the country, a latest study has found. Mumbai showed the maximum improvement in affordability since 2010, according to the study by Knight Frank India, a leading property consultancy firm.

It is now estimated that a house in Mumbai will cost approximately seven times the annual household income against 11 times in 2010. This ratio has similarly come down to five times for the national capital region (NCR) and Hyderabad against six times in 2010. Bengaluru and Chennai have seen affordability levels improve (see graphic).

Except for Mumbai, NCR and Hyderabad, all other the markets are below the 4.5-affordability benchmark. Mumbai, while still recording a high ratio of seven, has experienced the sharpest improvement since 2010.

The report evaluated the top eight markets of India to assess the affordability of homes. It noted that affordability in other cities, including NCR and information technology (IT) hubs of Bengaluru and Hyderabad, have also seen an improvement. “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,” said Shishir Baijal, chairman and managing director, Knight Frank India.