As people’s incomes increase, their purchasing power rises proportionally. This trend has significantly impacted the real estate sector, causing house prices to skyrocket. With higher incomes, more people can take out loans to buy homes, further driving up prices. Consequently, it has become increasingly difficult for the average person to afford a house. If you are planning to buy a home, there are still some cities where property prices remain relatively affordable.
Meanwhile, a report by real estate advisory firm Knight Frank has been released, which contains the names of five cities in which buying a house is affordable.
Which are these cities?
The first city on this list is Ahmedabad in Gujarat. The affordability ratio in Ahmedabad is 21 per cent. Pune and Kolkata are ranked second and third on this list, with affordability rates of 24 per cent. Chennai is in fourth place with an affordability ratio of 25 per cent. Bangalore is in fifth place with an affordability ratio of 26 per cent.
What is the affordability ratio?
The affordability ratio means how much of your salary you can spend to buy a house in a city. For example, to buy a house in Ahmedabad, you will have to spend an average of 21 per cent of your salary. The Delhi-NCR affordability ratio is 27 per cent. For the unversed, if we compare 2010 with now, then this ratio has improved a lot. One can guess this from the fact that the affordability ratio in Ahmedabad was 46 per cent in 2010, which has now become 21 per cent.
Earlier, Knight Frank, the international property consultancy, noted in its report ‘Prime Global Cities Index Q1 2024’ that Mumbai and New Delhi recorded an increase in their average annual prices, while Bengaluru witnessed a slight drop in prime residential or luxury homes in Q1 2024 (Indian cities considered for the study). Mumbai’s significant rise in the international index was largely due to the increase in demand in the city.
While the market has been strong across all sectors, the survey indicated an increase in sales of higher-value products.
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