Bengaluru is the fourth most expensive real estate market in India, according to a report by consulting company Knight Frank that generated an "affordability index" for the third quarter of this year. Bengaluru's index score is 28%, up from 26% during the same time period the previous year. The residential markets in Mumbai and Hyderabad were found to be among the most expensive in the country, followed by the Delhi NCR region. However, the index on Wednesday, October 12 showed that Bengaluru's affordable housing market has become more expensive as a result of the Reserve Bank of India's 50 basis point increase in the repo rate in September.
The median home loan rate's cumulative increase of 0.95% has affected homebuyers' affordability to buy and their decision to buy, according to Knight Frank's Affordability Index. The EMI (equated-monthly installment) to income ratio for an average household is tracked by the affordability index.
The report monitored the affordability of seven more Indian cities in addition to Bengaluru. Of the eight cities, Ahmedabad remained one of the country's most affordable housing markets. For the past nine months, from January to September, the city has retained its distinction as "the most affordable housing destination," the report said. Ahmedabad ranked second in the index with a score of 22%, followed by Pune in Maharashtra with a score of 26% and Chennai with 27%.
According to Shishir Baijal, chairman and MD of Knight Frank India, home affordability has become worse this year mostly as a result of the increase in median loan rates. As the rate cycle has changed, there has been a fall in affordability by two per cent. He added that although the decline in affordability is unlikely to have an effect on buyers' sentiments, it might influence their choices and force them to make concessions by taking lower-priced housing units into consideration.