Ahmedabad most affordable housing market among top cities: Report

AHMEDABAD: Ahmedabad has emerged as the most

affordable housing market

among top cities of the country. According to a property consultant, Knight Frank India's Affordability Index, the

EMI

(equated monthly instalment) to income ratio for households has improved in 2023 after a brief decline in affordability in 2022.

While marginally better than last year, home affordability across cities also significantly improved since pre-pandemic year of 2019.

"Ahmedabad remains the most affordable

housing market

in the country with an affordability ratio of 21% which implies that on an average a household in Ahmedabad needs to spend 21% of its household income to pay EMI for housing loans. Ahmedabad was followed by Kolkata and Pune at 24% each in 2023," the report stated.

The Knight Frank Affordability Index indicates the proportion of income that a household requires to fund the EMI of a housing unit in a particular city. It has assumed loan tenure of 20 years with 80% loan value.
It added that expected moderation in inflation and projected downward trend in interest rates should improve home affordability in 2024.
According to the report, Mumbai is the only city beyond the affordability threshold of 50%, a level exceeding which banks rarely underwrite a mortgage. The most expensive residential market of the country, Mumbai, has however seen an improvement of 2% in its affordability index measured at 51% in 2023 from 53% in 2022. Hyderabad is the second most expensive residential market in the country. The affordability index of the city remained unchanged at 30% for both the years of 2023 and 2022 as home prices increased by 11% in 2023.

Shishir Baijal, chairman & managing director, Knight Frank India, said, "Anticipating stable GDP growth and moderation in inflation in FY2024-25, affordability is expected to strengthen."