19C
Delhi
Tuesday, January 26, 2021

Home purchase affordability in India rises amid pandemic

- Advertisement -

Luxury real estate continues to witness weak demandNew Delhi, Oct 29 (IANS) Affordability of homes has increased across cities in India largely on the back of low home loan rates, said a JLL report.

It also showed that property values in a majority of India’s prime residential markets have been stagnant over the past few years, forcing most of the developers to work on very low margins.

As per JLL’s analysis, affordability has increased across all cities between 2011 and 2020. Despite a bigger fall in annual household income as compared to the residential prices, affordability increased in 2020.

“A sharp decrease in the cost of funding – average home loan rates reduced from around 8.9 per cent in 2019 to 7.5 per cent in 2020, more than offset the adverse impact of lower incomes on affordability,” it said.

READ ALSO:  EU moves resolutions against India over CAA, Kashmir; India unfazed

The report noted that household incomes have witnessed steady growth in the past decade. The growth in household income has been consistently higher than the growth in house prices since 2011, it said.

The report noted that the current year has been an exception. Few developers in certain markets are providing moderate price discounts to facilitate cash flows in the short run. Moreover, developers are offering various freebies such as no EMIs for a year, no stamp duty among others to attract prospective homebuyers.

This has resulted in a marginal dip in residential prices in certain markets. While prices remained stagnant in the southern cities of Bengaluru and Hyderabad, the other markets under review witnessed a dip of 1-3 per cent in effective prices. At the same time, an unprecedented rise in unemployment, coupled with salary cuts during the year led to incomes decreasing (4-7 per cent dip) by a greater proportion in all the markets.

READ ALSO:  Opposition plans to meet next week on farmers issue

Housing Purchase Affordability Index (HPAI) is the ratio of the average household income to the eligible household income. Eligible household income is defined as the minimum income that a household should earn in order to qualify for a home loan on a 1,000 square feet apartment at the prevailing market price.

READ ALSO:  Govt to go ahead with CAA implementation: Kishan Reddy

It noted that once the revival of the economy starts and prospective buyers feel secure about their future income flows, sales of residential units is expected to witness an uptick.

As per the JLL report, home purchase affordability in 2021 is expected to either remain at similar levels or improve from the levels of 2020.

Source: IANS

India Updates
India Updates is an independent news & Information website. Follow us for regular updates on News and Information.

Follow Us On

Related News

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Trending Topics In India

Covid 19 India Updates

Trending News In India

Trending Showbiz

Trending Sports

Latest Trending News In India

India won’t be bullied, pick your best team: Hussain to England

London, Jan 26 (IANS) Former England skipper Nasser Hussain has urged the Joe Root-led side to pick his best team and not to take...

A Timeline: How things turned violent in Delhi on R-Day

New Delhi, Jan 26 (IANS): Farmers, who were seen as friendly and peaceful for more than 60 days as they waited for government to accept...

After violent clashes with police, farmers swarm Red Fort

New Delhi, Jan 26 (IANS) In unexpected developments, hundreds of protesting farmers swarmed the historic Red Fort on Tuesday as their 'Kisan Gantantra Parade'...

Make in India boost, oil cess may be halved

New Delhi, Jan 26 (IANS) The government may give a 'Make in India' push to oil and gas explorers, as it is considering a...