Latest news with #AffordabilityIndex
India Today
4 hours ago
- Business
- India Today
Planning to buy a house? This is India's most affordable city in 2025
There's something deeply personal about buying a home. It's not just about bricks and beams. It's where memories ae made and dreams quietly unfold with each passing year. But for many families, that dream often feels just out of if you are planning to buy a home in India this year, Ahmedabad may be your best option. According to Knight Frank India's latest Affordability Index, the city is the most affordable in the country in index, which tracks housing affordability across major Indian cities, shows that buyers in Ahmedabad spend only 18% of their average income on home loan EMIs. This is well below the 40% affordability limit, making Ahmedabad the most budget-friendly city for comes next, with an affordability ratio of 22%, followed by Kolkata at 23%. These cities continue to offer better value to buyers when compared to other metros. The Affordability Index considers various factors such as property prices, average household income, and home loan rates to calculate what share of a household's income goes towards monthly INTEREST RATES HELP BUYERSThe report highlights that the Reserve Bank of India's decision to cut the repo rate by 100 basis points since February 2025 has played a key role in improving housing affordability across the country. Lower interest rates have reduced EMIs for home loans, making it easier for people to buy fact, the first half of 2025 has seen a steady improvement in affordability in most cities. One of the most notable changes was seen in Mumbai. Known for its high property prices, Mumbai has always been the least affordable housing market in India. But for the first time since the index was introduced, Mumbai's affordability ratio dropped below the 50% mark, to 48%. While this is still higher than other cities, it marks the city's most affordable period in recent SEES A SMALL DROP IN AFFORDABILITYIn contrast, the National Capital Region (NCR) saw a slight decline in affordability. The index shows that buyers now spend 28% of their income on housing, up from earlier figures. This is mainly due to rising residential prices, which have partly offset the benefit of lower interest to Shishir Baijal, Chairman and Managing Director of Knight Frank India, 'Affordability plays a critical role in maintaining homebuyer demand and sustaining sales momentum.' He explained that growing incomes and stable economic conditions help people feel more confident about making long-term financial commitments like buying a also pointed out that the RBI's estimated GDP growth of 6.5% for FY 2026, along with a supportive interest rate environment, is likely to keep affordability at healthy levels through the rest of CONDITIONS SUPPORT BUYINGThe RBI's recent measures, including a neutral stance on policy rates and a cut in the Cash Reserve Ratio (CRR), have helped improve liquidity in the banking system. This has made it easier for banks to lend, reducing borrowing costs for both homebuyers and with this, the overall economic environment is improving. Inflation has stayed under control, salaries are growing steadily, and the economy is on track. These factors have led to better affordability, encouraging more people to consider home report also notes that current affordability levels are some of the best seen since the post-pandemic period. This, along with lower interest rates and stable income growth, is helping drive a steady recovery in the housing anyone planning to buy a home in 2025, cities like Ahmedabad, Pune and Kolkata offer the most attractive conditions right now.- Ends advertisement
Hans India
7 hours ago
- Business
- Hans India
Home purchases are more affordable now
Mumbai: The house purchase affordability of homebuyers has improved in the first half of 2025 as the RBI slashed the repo rate by 100 basis points during this period, according to real estate advisory firm Knight Frank India. According to the Knight Frank Affordability Index, Ahmedabad is the most affordable housing market among the top eight cities, with a ratio of 18 per cent, followed by Pune at 22 per cent and Kolkata at 23 per was the least affordable city with a ratio of 48 per cent. However, the city's affordability index level improved by over 2 percentage points, moving from 50 per cent in 2024 to 48 per cent in H1 2025.' This is the first time in the history of the index that Mumbai has come below the threshold of the 50 per cent mark, which is considered the outer point of affordability. Mumbai's market, which has always been above the threshold, has now become more affordable due to the reduced home loan rates,' the report said. Affordability levels have marginally worsened in the National Capital Region during the same period, with households now needing to pay 28 per cent of their income for acquiring an average property in the city instead of 27 per cent in 2023. This can be attributed to the steep increase in residential prices, which have eclipsed the impact of the interest rate cuts in the NCR, according to the report. Knight Frank India's Affordability Index is based on the EMI (Equated Monthly Instalment) to income ratio for an average Baijal, CMD, Knight Frank India, said, 'As incomes grow and the economy gains strength, financial confidence among end-users improves, motivating them to commit to long-term investments such as home ownership. Given the RBI's healthy 6.5 per cent GDP growth estimate for FY 2026 and a favourable interest rate scenario, affordability levels are expected to be supportive of homebuyer demand in 2025.'
United News of India
10 hours ago
- Business
- United News of India
Interest rate cuts boost House purchase affordability of homebuyers in H1 2025: Knight Frank India
Hyderabad, June 24 (UNI) House purchase affordability of homebuyers has improved in H1 2025 as the RBI slashed the repo rate by 100 bps during the period, according to Knight Frank India, in its proprietary report, Affordability Index. According to the Affordability Index, Ahmedabad is the most affordable housing market among the top eight cities, with a ratio of 18 percent, followed by Pune at 22 percent and Kolkata at 23 percent while Mumbai was the least affordable city with an affordability level of 48 percent. However, it is noteworthy that the market has breached the 50 percent mark for the first time in the history of the index. Knight Frank India's Affordability Index, which tracks the EMI (Equated Monthly Instalment) to income ratio for an average household, witnessed 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 policy repo rate (REPO) to decadal lows. The central bank subsequently raised the REPO rate by 250 bps in a space of nine months starting May 2022 to address high inflation which caused stress on affordability levels. However, with inflation worries subsiding and economic growth regaining focus, the RBI slashed the REPO rate by 100 bps since February 2025. Shishir Baijal, Chairman and Managing Director, Knight Frank India said: "Affordability plays a critical role in maintaining homebuyer demand and sustaining sales momentum, both of which are vital contributors to the broader economy. As incomes grow and the economy gains strength, financial confidence among end-users improves, motivating them to commit to long-term investments such as home ownership. Given the RBI's healthy 6.5 percent GDP growth estimate for FY 2026 and a favourable interest rate scenario, affordability levels are expected to be supportive of homebuyer demand in 2025.' While the Indian economy is not insulated from the volatile geopolitical and economic environment, it continues to enjoy a relatively favourable economic growth and inflation environment. This has supported income growth and enabled lower interest rates which have in turn helped improve affordability despite the increase in residential prices. Incidentally, affordability levels are now at their best since the pandemic and are significantly better than the levels seen at the end of 2024, just before the first rate cut announced in February 2025. In Mumbai, the affordability index level improved by over 2 percentage points, moving from 50 percent in 2024 to 48 percent in H1 2025. This is the first time in the history of the index that Mumbai has come below the threshold of 50 percent mark which is considered the outer point of affordability. Mumbai's market which has always been above the threshold has now become more affordable due to the reduced home loan rates. Affordability levels have marginally worsened in NCR during the same period with households now needing to pay 28 per cent of their income for acquiring an average property in the city instead of 27 per cent in 2023. This can be attributed to the steep increase in residential prices which have eclipsed the impact of the interest rate cuts in the NCR. The RBIs neutral stance and intent to keep interest rates stable is expected to sustain affordability levels in the near term. The interest rate cut and CRR reduction in H1 2025 have significantly enhanced liquidity in India's financial system by unlocking substantial funds for lending and reducing the cost of borrowing. This infusion of liquidity should spur credit expansion and benefit both developers and urban homebuyers, thereby providing a boost to the broader real estate market. UNI KNR RN
Time of India
a day ago
- Business
- Time of India
Homebuyers gain as RBI's repo cuts improve housing affordability in H1 2025
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Services 1. Raymond Realty to launch Rs 14,000 cr worth housing projects in FY26, fixes July 1 for listing on bourses Housing affordability across India's major cities improved in the first half of 2025, following the Reserve Bank of India's (RBI) cumulative reduction of 100 basis points in the repo move has resulted in better equated monthly instalments (EMI)-to-income ratios in seven of the eight leading housing markets in the country, with financial conditions turning more favourable for end-users, showed data from Knight Frank India 's Affordability Index According to the index, Ahmedabad remained the most affordable housing market among the top eight Indian cities, with an affordability ratio of 18%, followed by Pune at 22% and Kolkata at 23%.Mumbai, the most expensive residential market in India, showed a notable improvement, with affordability rising from 50% in 2024 to 48% in the first half of 2025. This is the first time the city has dipped below the 50% threshold since the inception of the index, which is considered the outer limit of Frank India's Affordability Index, which tracks the ratio of EMIs to household income, had shown steady improvement between 2010 and 2021, particularly during the pandemic when the RBI cut the repo rate to multi-year lows. However, the central bank raised the repo rate by 250 basis points starting May 2022 over a span of nine months to control inflation, which adversely affected inflation now easing and focus shifting back to growth, the RBI has cut the repo rate by 100 basis points since February 2025, enhancing affordability levels across key markets.'Affordability plays a critical role in maintaining homebuyer demand and sustaining sales momentum, both of which are vital contributors to the broader economy. As incomes grow and the economy gains strength, financial confidence among end-users improves, motivating them to commit to long-term investments such as home ownership. Given the RBI's healthy 6.5% GDP growth estimate for FY 2026 and a favourable interest rate scenario, affordability levels are expected to be supportive of homebuyer demand in 2025,' said Shishir Baijal, CMD, Knight Frank improvement in affordability is also supported by sustained income growth and a stable inflation environment. While residential prices have increased across markets, lower borrowing costs have helped offset some of the pressure, bringing affordability to its best levels since the pandemic. Compared to end-2024, conditions have improved affordability gain of over 2 percentage points marks a historic shift, making it slightly more accessible for potential homebuyers . In contrast, NCR saw a marginal dip in affordability, with the ratio rising from 27% in 2023 to 28%, primarily due to sharp price increases that outweighed the benefits of rate RBI's neutral policy stance, combined with the CRR reduction in H1 2025, has increased liquidity in the banking system, encouraging lending and reducing borrowing costs. These developments are expected to support demand in the residential market, benefiting both homebuyers and developers in the near term.
India.com
a day ago
- Business
- India.com
Home Purchases Turn More Affordable After RBI Rate Cuts: Report
Mumbai: The house purchase affordability of homebuyers has improved in the first half of 2025 as the RBI slashed the repo rate by 100 basis points during this period, according to real estate advisory firm Knight Frank India. According to the Knight Frank Affordability Index, Ahmedabad is the most affordable housing market among the top eight cities, with a ratio of 18 per cent, followed by Pune at 22 per cent and Kolkata at 23 per cent. Mumbai was the least affordable city with a ratio of 48 per cent. However, the city's affordability index level improved by over 2 percentage points, moving from 50 per cent in 2024 to 48 per cent in H1 2025. "This is the first time in the history of the index that Mumbai has come below the threshold of the 50 per cent mark, which is considered the outer point of affordability. Mumbai's market, which has always been above the threshold, has now become more affordable due to the reduced home loan rates," the report said. Affordability levels have marginally worsened in the National Capital Region during the same period, with households now needing to pay 28 per cent of their income for acquiring an average property in the city instead of 27 per cent in 2023. This can be attributed to the steep increase in residential prices, which have eclipsed the impact of the interest rate cuts in the NCR, according to the report. Knight Frank India's Affordability Index is based on the EMI (Equated Monthly Instalment) to income ratio for an average household. Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, "As incomes grow and the economy gains strength, financial confidence among end-users improves, motivating them to commit to long-term investments such as home ownership. Given the RBI's healthy 6.5 per cent GDP growth estimate for FY 2026 and a favourable interest rate scenario, affordability levels are expected to be supportive of homebuyer demand in 2025." While the Indian economy is not insulated from the volatile geopolitical and economic environment, it continues to enjoy a relatively favourable economic growth and inflation environment. This has supported income growth and enabled lower interest rates, which have in turn helped improve affordability despite the increase in residential prices. Incidentally, affordability levels are now at their best since the pandemic and are significantly better than the levels seen at the end of 2024, just before the first rate cut announced in February 2025, the report added.
