Bengaluru ranked fourth in terms of expensive residential markets in the country, according to a report.
In the third quarter of CY22, the affordability index of the city currently stands at 28 per cent, while it was 26 per cent in 2021.
The affordability index for Q3 2022 shows a decline in affordability across all markets due to the recent rise in median loan rates as a result of the 50 basis points (bps) increase in repo rates, finds the latest report by Knight Frank India.
The report states that the 0.95 per cent cumulative increase in the median home loan rate will impact the affordability of homebuyers and their purchase decisions.
According to the nine-month assessment (Jan-Sep 2022) of the affordability index, Ahmedabad continued to remain the most affordable housing market amongst the top eight cities, with a ratio of 22 per cent, Pune at 26 per cent, and Chennai at 27 per cent.
“Home affordability, due to the rise in median loan rates has worsened in 2022. Affordability has deteriorated by two per cent points across cities since the rate cycle changed. However, with the need for homeownership still being strong, homebuyers will largely make necessary compromises by considering lower-priced housing units rather than deferring their purchases as expectations of further price increases will discourage deferment,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India
Knight Frank’s proprietary Affordability Index tracks the EMI (Equated Monthly Instalment) to income ratio for an average household.