In a notable shift, Hyderabad has outpaced Delhi NCR, securing the position of India’s second-most expensive residential market. This revelation comes from Knight Frank India’s exclusive Affordability Index, shedding light on the financial dynamics of housing across major cities. While Mumbai still retains its title as the most unaffordable city, Ahmedabad and Kolkata stand out as beacons of affordability. Let’s delve into the details reshaped for a captivating read.
Mumbai’s Unwavering Unaffordability
Mumbai stands as the sole city breaching the 50 percent affordability threshold, a critical point where banks hesitate to underwrite mortgages. Despite its steep property prices, Mumbai has witnessed a marginal improvement, with its affordability index dropping from 53 percent in 2022 to 51 percent in 2023. Anarock’s analysis further indicates that Mumbai Metropolitan Region (MMR) recorded the highest sales, reaching approximately 153,870 units in 2023, followed closely by Pune with about 86,680 units.
Hyderabad’s Steady Surge in Real Estate
Claiming the position of the second most expensive residential market in India, Hyderabad maintains a consistent affordability index at 30 percent for both 2022 and 2023. Despite a significant 11 percent spike in home prices in 2023, the city experienced a commendable 30 percent surge in sales, reaching 61,715 units. This underscores Hyderabad’s resilience and desirability in the real estate landscape.
NCR’s Affordability Endeavor
On the flip side, the National Capital Region (NCR) saw a slight improvement in its affordability index, dropping from 29 percent in 2022 to 27 percent in 2023. However, the data from Anarock suggests a modest 3 percent increase in sales, reaching 65,625 units in 2023. NCR’s real estate scenario reflects a delicate balance between affordability and market activity.
Bengaluru’s Incremental Affordability
Securing its position as the fourth most expensive market, Bengaluru boasts an affordability index of 26 percent in 2023. With a marginal 1 percent improvement since 2022 and a noteworthy 6 percent rise from the pre-pandemic year of 2019, Bengaluru witnessed approximately 63,980 units sold in 2023, marking a commendable annual increase of 29 percent.
Chennai’s Affordability Renaissance
Chennai displays a positive trend in affordability, with its index improving from 27 percent in 2022 to 25 percent in 2023. The city witnessed a substantial 34 percent annual increase in sales, reaching around 21,630 units. This signifies a growing appeal for real estate in Chennai, coupled with improved affordability metrics.
Overarching Growth in Residential Sales
Anarock’s comprehensive analysis reveals that 2023 witnessed a remarkable surge in residential unit sales across the seven major cities. Approximately 476,530 units were sold, marking the highest in the last decade. This growth of 31 percent over 2022 indicates a robust real estate market, surpassing the previous peak in 2022. Mumbai Metropolitan Region (MMR) and Pune emerged as the forerunners, collectively leading residential sales in 2023.
In conclusion, the ever-evolving landscape of India’s real estate sector showcases dynamic shifts in affordability and market performance. As Hyderabad rises to prominence and cities like Mumbai and NCR navigate the balance between luxury and accessibility, the overall trajectory signals a resilient and flourishing real estate market across the nation.
Frequently Asked Questions (FAQ’s)
Ans: Hyderabad’s elevation to the second-most expensive residential market is attributed to its consistent affordability index at 30 percent for both 2022 and 2023. Despite an 11 percent increase in home prices in 2023, the city experienced a remarkable 30 percent surge in sales, reflecting its robust real estate demand.
Ans: A city’s affordability index plays a crucial role in mortgage underwriting decisions. An affordability index exceeding 50 percent is considered unaffordable, and banks are reluctant to underwrite mortgages beyond this threshold. Mumbai stands out as the only city breaching this limit, emphasizing its challenges in the mortgage market.
