Latest news with #KnightFrankAffordabilityIndex
Hans India
16 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.'
India.com
2 days 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.
Hans India
2 days ago
- Business
- Hans India
Home purchases turn more affordable after RBI rate cuts: Report
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.
Hindustan Times
2 days ago
- Business
- Hindustan Times
Ahmedabad, Pune, and Kolkata lead in housing affordability; Mumbai improves, NCR slips
The Reserve Bank of India's repo rate cut in H1 2025 has boosted housing affordability, particularly in Ahmedabad, Pune, and Kolkata, now ranked as the top three most affordable residential markets among eight Indian cities, according to Knight Frank India's Affordability Index. Ahmedabad, Pune, and Kolkata, now ranked as the top three most affordable residential markets among eight Indian cities, according to Knight Frank India's Affordability Index. (Photo for representational purposes only)(Pixabay) Ahmedabad leads with an affordability ratio of 18%, followed by Pune at 22% and Kolkata at 23%. Mumbai remains the least affordable market with a ratio of 48%, though notably, it has dropped below the 50% threshold for the first time in the history of the index. In Mumbai, the affordability index improved by over 2 percentage points, from 50% in 2024 to 48% in H1 2025, marking the first time the city has dipped below the 50% threshold, which is considered the upper limit of affordability. Traditionally above this benchmark, Mumbai's market has become relatively more affordable due to lower home loan interest rates, the report said. NCR's affordability levels decline due to increase in housing prices In contrast, affordability levels in the National Capital Region (NCR) have slightly worsened, with households now needing to spend 28% of their income to buy an average home, up from 27% in 2023. This decline in affordability is attributed to a sharp rise in residential prices, which has offset the benefits of recent interest rate cuts, the report said. 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 report noted. 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. This has improved affordability across 7 of the 8 cities in H1 2025. The Knight Frank Affordability Index indicates the proportion of income that a household requires, to fund the monthly instalment (EMI) of a housing unit in a particular city. So, a Knight Frank Affordability index level of 40% for a city implies that on an average, households in that city need to spend 40% of their income to fund the EMI of housing loan for that unit. An EMI/ Income ratio over 50% is considered unaffordable as it is the limit beyond which banks rarely underwrite a mortgage. Also Read: Housing sales drop by 19% across nine cities, and supply dips by 30%.; Mumbai sees steepest decline: Report "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, chairman and managing director, Knight Frank India.
