Major cities see improvement in home affordability in 2021: Report

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Due to an increase in household incomes from the low base of 2020, lower mortgage rates and stable housing prices, affordability to buy homes has improved, according to property consultant JLL India’s Home Purchase Affordability Index (JLL HPAI 2021). The index, which was released on Monday, says that whether an household earning an average annual income is eligible for a housing loan on a property in their respective cities, at their prevailing market price.

JLL said that household incomes increased 7-9% in the current year, owing to the low base of 2020 in the markets under consideration. Also, with the exception of Hyderabad, the consultant said that home prices remained stagnant in all of India’s prime residential markets.

It also said declining mortgage rates have resulted in lower EMIs. This has had a significant bearing on the affordability, the consultant said.

Kolkata-best in home purchase affordability

Between 2013 and 2021, the index highlighted that affordability has risen consistently across key Indian cities like Delhi-NCR, Mumbai, Kolkata, Chennai, Pune, Hyderabad and Bengaluru.

The index of Delhi-NCR is set to rise from 132 to 143, while Mumbai, the country’s most property market has seen a significant increase in home affordability index, breaching the affordability threshold of 100 this year, according to JLL HPAU 2021. The city’s index is estimated to improve to 100 this year from 94 in 2020.

Kolkata is the best market in terms of home purchase affordability. The city’s affordability index is estimated to improve to 218 this year from 201 in 2020, according to JLL report, HPAI.

Hyderabad is expected to cross the 200-mark on the affordability index followed closely by Pune, this year. The affordability index of the former is likely to improve to 203 from 193, the latter’s index may increase to 198 from 186.

Bengaluru’s HPAI is expected to cross to 191 from 176, while the index of Chennai could rise to 185 from 174.