Kolkata: Ahmedabad has the most affordable housing market in India among the top eight cities in the country, a study said on Saturday.
Pune, Chennai, and Kolkata occupy the next three positions, as per data collected in the first half of the calendar year 2022, 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 basis point rise in Repo rate (the rate at which the country’s apex bank RBI lends money to commercial banks) by purchasing securities.
As per the mid-year assessment of the affordability index, Ahmedabad led with a ratio of 22 percent followed by Pune and Chennai at 26 percent each.
The affordability index, which tracks the EMI (Equated Monthly Installment) to income ratio for an average household, witnessed a 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 the Repo rate to a decadal low.
However, with two consecutive Repo rate hikes announced by the RBI’s Monetary Policy Committee, the cumulative 90 bps rate hike has decreased home purchase affordability on an average by two percent across markets and increased the EMI load by 6.97 percent.