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The constant demand to move to India’s Silicon Valley has made Bengaluru the fourth most expensive real estate market, with a 2 per cent annual rise in its position at 28 per cent, a Knight Frank consultancy firm report showed.
On the city-wise data, the report said Mumbai remains the most expensive residential market in the country. Mumbai is the only city whose affordability index is improving at the rate of 4 per cent — from 53 per cent in 2021 to 57 per cent in the third quarter of this year.
Mumbai and Hyderabad were known to have one of the most expensive residential markets in the country. Still, the index on Wednesday revealed that Bengaluru’s affordable housing market has become more costly due to the 50 bps hike in the repo rate by the Reserve Bank of India in September.
According to the Affordability Index by Knight Frank, a cumulative increase of 0.95 per cent in the median home loan rate has impacted the purchase affordability and purchase decisions of homebuyers.
The Affordability Index tracks the EMI (equated-monthly instalment) to income ratio for an average household.
“Home affordability, due to the rise in median loan rates, has worsened in 2022. On September 30, the RBI increased the repo rate by 50 bps, taking the cumulative hike to 190 bps in 2022,” said Shishir Baijal, chairman and managing director of Knight Frank India.
Ahmedabad, Chennai, and Pune continue to be India’s most affordable housing markets.
Out of the eight cities, Ahmedabad has consistently been the most affordable city in India since 2019. From 46 per cent in 2010, the home purchase affordability index improved to 25 per cent in 2019.
According to the report, Ahmedabad stood at 22 per cent in the index, followed by Maharashtra’s Pune, which stood at 26 per cent, and Chennai scored 27 per cent in the index.
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