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Affordable Bargain: Can Low-Cost Housing Be A Plausible Choice?

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Affordable Bargain: Can Low-Cost Housing Be A Plausible Choice?
Photo: Nirala Tripathi
Harsh Kumar - 29 October 2022
After a slump of more than two years, the real estate industry is looking up to brighter days again. According to Credai’s Housing Price-Tracker released in August 2022, housing prices in India surpassed the pre-pandemic levels in the second quarter of 2022. The average residential prices rose 5 per cent annually in this period. For buyers, this means paying more, at a time when interest rates on home loans are rising. Since May 2022, the Reserve Bank of India (RBI) has raised repo rates by 190 basis points (bps). One bps is a hundredth of a percentage point. So, can homebuyers turn to affordable housing, which also comes with certain incentives? Let’s explore. Falling Affordability According to a report by global property consultant Knight Frank India, released in October, all markets have seen a decline because of the recent rise in median loan rates. This has also affected purchase decisions. Knight Frank’s proprietary Affordability Index, which tracks the equated monthly instalment (EMI) to income ratio for an average household, shows that home purchase...
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