Housing in India is more affordable than it has ever been.
Nowadays, buying a home is more affordable than it was 10 years ago because of stagnant property prices, record low interest rates on loans, and slight increases in the average household income. In the majority of cities, the trend is most likely to continue in 2022.
The combination of three parameters - family income, real estate prices, and home loan interest rates - has rendered residential property the most affordable since 2011.
In the key residential markets of Nashik, Pune, Mumbai, Bengaluru, Delhi NCR, Chennai, Hyderabad, and Kolkata, the household income climbed by 7-9 percent (from the low base of 2020) in the current calendar year (CY).
With the exception of Hyderabad, real estate prices in all premium residential markets stayed unchanged.
The last 15 years have seen the lowest lending rates. Reduced equivalent monthly payments for buyers result from lower house loan interest rates, which significantly affects affordability.
Loan rates are unlikely to rise in the next CY, despite the possibility of rising housing prices, since the central bank will continue to prioritize consumer spending. As a result, it is expected that total house purchase affordability would either stay the same or slightly improve from 2021 levels.
However, growing affordability does not always equate to increased sales. Buyers make decisions before buying a home depending on the current economic climate, their work situation, and their expected future income.