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‘Low Interest Rates” In Past Few Years Have Made Housing Affordable In India’s Major Cities Except Mumbai
A housing project under construction. (Wikimedia Commons)
According to a new report, houses have become more affordable in major cities except for Mumbai over the past few years, primarily driven by a favourable interest rate regime.
“Affordability improved across India’s key markets from 2014 to 2018 led by favourable home loan rates,” said real estate consultancy firm JLL India in its recent report.
The firm launched its annual Home Purchase Affordability Index (JLL HPAI) earlier this month to signify whether a household earning an average yearly income (at an overall city level) is eligible for a housing loan to buy a 1,000 sq ft residential property in the city at the prevailing market price and home loan interest rate.
According to the Index which surveyed India’s key seven cities - Mumbai, Delhi NCR, Bengaluru, Chennai, Pune, Hyderabad and Kolkata - between 2011 and 2018, only Hyderabad was found to be affordable in 2013.
However, the situation has reversed positively by 2018 and currently all the cities except Mumbai crossed the affordability threshold as per JLL HPAI.
Cities Will Remain Affordable
Samantak Das, Chief Economist and Head of Research & REIS, JLL India said, “As per JLL HPAI, affordability levels will continue to improve over the next three years for all seven cities. Over the same period, we expect a steady increase of 3-5% in property rates and 8-9% increase in average annual household income and home loan interest rates to remain range-bound."
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