MUMBAI: Chennai, Ahmedabad, and Kolkata have emerged as the most affordable cities among the country’s top 10 property markets for residential investments in 2024, based on the ratio of property prices to annual household incomes (P/I ratio), a Magicbricks report showed.Mumbai Metropolitan Region (MMR) and Delhi are the least affordable. The Indian real estate market is currently experiencing an uptrend, marked by higher prices and escalating demand.Property prices across the top 10 cities surged at a compound annual growth rate (CAGR) of 9.3% between 2020 and 2024, the report said. Household incomes in these cities during the same period, however, increased at a much slower CAGR of 5.4%.This growing gap between income and property price growth rates has weakened affordability.In 2020, the average P/I ratio in top 10 Indian cities was 6.6, which means the average price of a house was 6.6 times the average annual household income. This has increased to 7.5 in 2024, much higher than the globally accepted benchmarks of 5, the Magicbricks report said.Chennai, Ahmedabad, and Kolkata’s P/I ratio stands at 5, while the Mumbai Metropolitan Region and Delhi’s ratio are at 14.3 and 10.1, respectively.The EMI-to-monthly income ratio in India has also risen from 46% in 2020 to 61% in 2024, indicating a growing burden of EMIs on home buyers and reflecting affordability concerns nationwide, especially metros, the report said. The trend is more pronounced in MMR (116%), New Delhi (82%), Gurugram (61%) and Hyderabad (61%). Cities like Ahmedabad (41%), Chennai (41%) and Kolkata (47%) are relatively more affordable.According to Magicbricks, the current situation is likely to hit equilibrium conditions with market trends indicating a deceleration in price growth due to an anticipated increase in residential supply.
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