Knight Frank report: Buying home becomes easier on improved affordability across India
The affordability has improved because the home size has shrunk by near 15-17 per cent across India, which helped developers to offer homes at lower rates.
On the back of improvement in affordability across India, buying a home has become easier, reports Knight Frank survey. In a recently concluded study by Knight Frank India, Mumbai showed maximum improvement in affordability since 2010. The report evaluates top eight markets of India, to assess the affordability of homes, and notes that affordability in other cities including National Capital Region (NCR) and IT Hubs of Bengaluru and Hyderabad have also seen an improvement.
Putting the light on the survey findings Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “Housing is one of the most persistent challenges faced by urban centers across the globe today. India, which is also faced with these challenges, however, is witnessing a gradual improvement in the area. A decline in average ticket size and focus on affordable housing have improved home affordability across the country to a large extent. The fact that affordability statistics have moved dramatically since 2010 explains why sales have finally improved in 2018.”
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Shishir further added, “With a focus on creating housing for all by 2022 and to bring back the real demand for housing in the market, improving affordability will be imperative. We can expect further strengthening of affordability in the near future as more affordable and mid ranged projects are undertaken by development companies.”
Source: Knight Frank
Elaborating upon the reason for this rise in affordability Rakesh Yadav, CMD, Antriksh India Group told Zee Business Online, "The affordability has improved because the home size has shrunk by near 15-17 per cent across India, which helped developers to offer homes at lower rates." Yadav said that in addition to reducing prices, there is a decline in the average size of residential units at launch, which has contributed to the growing affordability in the market. Markets of Mumbai (-25%), Pune (-24%) and Bengaluru (-18%) have seen a sharp reduction in average size of homes since 2010. Hyderabad (+4%) and Ahmedabad (+7%) are the only two markets that are offering larger homes. With annual sales reducing across all major markets, the shift towards making homes more affordable is visible.