Hyd emerges as 2nd most expensive housing market in H1

Hyd emerges as 2nd most expensive housing market in H1

Roger Pettingell Sarasota Real Estate

HYDERABAD: Hyderabad has emerged as the second most expensive housing market in the country after Mumbai among the top eight cities for the first half of 2022, according to international realty consultancy firm Knight Frank.
While Mumbai is the most expensive housing market at an EMI to income ratio of 56% for H12022 as against 53% in 2021, Hyderabad is the second most expensive at 31% (29% in 2021), followed by National Capital Region (NCR) at 30% (28% in 2021) and Bengaluru at 28% (26% in 2021) on the Knight Frank India Affordability Index for H1 2022 which tracks the EMI (equated monthly instalment) to household income ratio for an average household.

Hyderabad’s home purchase affordability index improved from 47% in 2010 to 33% in 2019 and with the pandemic striking in early 2020, it further improved to 31% in 2020 and again to 29% in 2021 but in H1 of 2022, it rose to 31% again.
On the other hand, Ahmedabad has emerged as the most affordable with 22% in H1 of 2022 (20% in 2021) followed by Pune at 26% (24% in 2021) and Chennai 26% (25% in 2021).
Knight Frank said for H1 of 2022, affordability and income levels have been calculated keeping all variables constant, except for the interest rate.
According to Knight Frank, all the markets have seen a decline in affordability due to the recent rise in home loan rates due to the 90 basis points rise in REPO rates. It said its proprietary Affordability Index witnessed steady improvement from 2010 to 2021 across the country’s eight leading cities, especially during the pandemic when the Reserve Bank of India (RBI) cut REPO rates to decadal lows.
“However, with two consecutive REPO rate hikes, the cumulative 90 BPS rate hikes by RBI has decreased home purchase affordability on an average by 2% across markets and increased EMI load by 6.97%,” Knight Frank India said.
Pointing out that home affordability had worsened in the last couple of months due to the rise in home loan rates, Knight Frank India chairman and managing director Shishir Baijal said: “On an average, affordability has decreased by 200-300 basis points across the major markets. However, despite the hike in the rates, markets remain largely affordable. This, coupled with the positive change in sentiments towards home ownership, we expect demand to remain unhindered with the momentum backed by the latent demand in the market continuing.”
He also pointed out that factors like strong economic growth outlook, financial stability and job security, the purchasing capabilities of potential buyers are expected to remain intact.

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