The Best Place to Buy Affordable Homes in India!

Growing Dream of Homeownership

As the Indian real estate sector continues to grow rapidly, owning a home remains a significant dream for the middle class. To encourage this segment, the central government has announced various schemes, but the primary beneficiaries are often those with greater financial means.

Finding Affordable Cities

So, which cities in India offer the most affordable housing options for the common man?

Knight Frank's Affordability Index

According to the 'Affordability Index 2021' released by Knight Frank, a leading real estate advisory firm in India, cities with house prices at 50% or less of the income level are considered affordable. The index assesses the affordability of housing in major cities.

The 50% Benchmark

If the affordability index is below 50%, the housing prices are considered affordable; if above 50%, they are deemed expensive. Among the major eight cities in India, Mumbai has the highest housing prices.

Affordable Cities

According to Knight Frank’s study, Mumbai has an affordability index of 53%. In 2016, Mumbai’s index was 92. In 2021, the top three cities with the most affordable housing prices among the major eight cities in India are Ahmedabad (20%), Pune (24%), and Chennai (25%).

Bangalore's Improvement

Following Mumbai, Bangalore, where many Tamil people reside, saw its affordability index decrease from 57% in 2012 to 26% currently.

Real Estate Sector Insights

The Affordability Index is a fundamental metric in the real estate sector. It evaluates property prices, home loan interest rates, average income levels, and mortgage repayment capacity in various cities.

Impact on Growth

A lower Affordability Index is essential for the growth of the real estate sector. Otherwise, trade, employment opportunities, and financial transactions in this sector will be adversely affected.

Government and Developer Initiatives

The government's efforts to boost affordable housing include schemes like the Pradhan Mantri Awas Yojana (PMAY), which aims to provide housing for all by 2022. Developers are also focusing on building budget-friendly homes to cater to the growing demand from the middle-class segment.

Future Trends

The demand for affordable housing is expected to rise further as more people move to urban areas seeking better employment opportunities and living conditions. This trend is likely to drive the real estate market, with developers and investors focusing on affordable housing projects.

Conclusion

Understanding the affordability of housing in different cities helps potential buyers make informed decisions. With the right policies and investments, the dream of owning a home can become a reality for many more Indians. The real estate sector, supported by government initiatives and favorable market conditions, is poised for sustained growth, benefiting both the economy and aspiring homeowners.