Chennai among affordable housing markets in country: Study

Its index, which tracks the EMI (Equated Monthly Instalment) to income ratio for an average household, witnessed steady improvement from 2010 to 2021 across the eight leading cities of India especially during the pandemic when the Reserve Bank of India (RBI) cut REPO rates to decadal lows. However, with two consecutive REPO rate hikes, the cumulative 90 bps rate hikes by RBI has decreased home purchase affordability on an average by 2% across markets and increased EMI load by 6.97%.

Update: 2022-07-09 01:13 GMT
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CHENNAI: Knight Frank India in its proprietary study ‘Affordability Index for H1 2022’ cited that all markets have seen a decline in affordability due to the recent rise in home loan rates as a result of the 90 BPS rise in REPO rates. As per the mid-year assessment of the affordability index, Ahmedabad is the most affordable housing market amongst the top eight cities, with a ratio of 22% followed by Pune and Chennai at 26% each in the first half of the calendar year 2022.

Its index, which tracks the EMI (Equated Monthly Instalment) to income ratio for an average household, witnessed steady improvement from 2010 to 2021 across the eight leading cities of India especially during the pandemic when the Reserve Bank of India (RBI) cut REPO rates to decadal lows. However, with two consecutive REPO rate hikes, the cumulative 90 bps rate hikes by RBI has decreased home purchase affordability on an average by 2% across markets and increased EMI load by 6.97%.

Shishir Baijal, CMD, Knight Frank India said, “The home affordability, due to the rise in home loan rates by 90 BPS, has worsened in the last couple of months. On an average, affordability has decreased by 200-300 basis points across the major markets. However, despite the hike in the rates, markets remain largely affordable. This, coupled with the positive change in sentiments towards home ownership, we expect demand to remain unhindered with the momentum backed by the latent demand in the market continues. Further, factors like strong economic growth outlook, financial stability and job security, the purchasing capabilities of potential buyers are expected to remain intact.”

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