During the current year, household incomes witnessed a sharp increase of 7%-9% (from the low base of 2020) in the markets under consideration, the report stated.
Home purchase affordability has increased consistently across key Indian cities in the last eight years — between 2013 and 2018 — according to JLL India’s annual Home Purchase Affordability Index (JLL HPAI 2021), released on Monday.
During the current year, household incomes witnessed a sharp increase of 7%-9% (from the low base of 2020) in the markets under consideration, the report stated. At the same time, home prices remained stagnant in all of India’s prime residential markets except for Hyderabad. Moreover, mortgage rates continue to trend at their lowest in 15 years, thereby leading to reduced EMIs for homebuyers, thus having a significant bearing on affordability.
The second Covid-19 wave dented the market following a good recovery curve. However, the impact was muted when compared to the same period last year. Importantly, lockdown restrictions across cities are being eased and the vaccination drive is gathering pace. Most of the changes witnessed in the sector have been structural in nature and demand for homes is only expected to increase.
According to the JLL HPAI 2021 index, Mumbai (India’s most expensive property market) has witnessed a significant rise in home affordability index, breaching the affordability threshold of 100 this year. In 2020, Kolkata overtook Hyderabad to become the best market in terms of home purchase affordability.
The current year is expected to witness Hyderabad surpass the 200-mark on the affordability index followed closely by Pune.
The index indicates that an average income earning household in the markets of Hyderabad and Kolkata has enough income to qualify for a home loan on two 1,000 square feet apartments (or one 2,000 sq. ft apartment) at the prevailing market price, the report stated.