Thinking about buying a property for a long time? Well, the present time may turn out to be a lifetime opportunity for you to own that dream home.
According to a new Knight Frank’s proprietary Affordability Index, the property prices have gone below the benchmark level compared to the average annual household income in most of the cities in India. The favorable affordability seems to stay here for a while at least till approaching General Elections.
The report states that except for Mumbai, NCR, and Hyderabad, the index in all other markets is even below the ideal affordability benchmark. Although Mumbai remains the most expensive housing market with an affordability index of 7, the MMR real estate market has seen a spike in the affordability of homes since 2010, Financial Express reported.
Ideal affordability is identified at 4.5 times the average annual household income in a city in the report. While this ratio has come down to 5 times for the NCR and Hyderabad against 6 times in 2010, Bengaluru and Chennai have a comfortable affordability index of 4. The properties in cities like Kolkata, Ahmedabad, and Pune become even cheaper with prices stand at just 3 times their average household incomes.
The increase in affordability can be attributed to a decline in average ticket size and more focus on affordable housing. Realtors are now offering smaller sized homes as there been a decline in the average size of residential units launched in the period of study.
Apart from the increased affordability, home loans are set to become cheaper owing to the RBI rate cut to 6.25 percent from 6.50 percent earlier.
Structural reforms, such as Benami Transactions (Prohibition) Amendment Act, 2016 and demonetisation of high value currencies, along with Real Estate (Regulation and Development) Act (RERA), 2016 and Credit-Linked Subsidy Scheme (CLSS), the Pradhan Mantri Awas Yojana (PMAY), are jointly contributing in making the real estate a lucrative as well as a safe option to invest at the time.