Despite a steady rise in the inventory and sales of affordable houses over the last few years, an RBI survey released on Thursday shows that affordability in the country’s housing sector has actually deteriorated in the last four years.
“Housing affordability worsened over the past 4 years as the house price to income (HPTI) ratio increased from 56.1 in March 2015 to 61.5 in March 2019,” said the Residential Asset Price Monitoring Survey.
Mumbai remains the least affordable city in India, while Bhubaneswar remains the most affordable, it said.
The report also said that the movement of median loan to income (LTI) ratio also confirms worsening housing affordability as it moved from 3.0 in March 2015 to 3.4 in March 2019.
The median EMI-to-Income (ETI) ratio, however, remained relatively steady during the past 2 years, with exceptions of Mumbai, Pune, and Ahmedabad which recorded higher median ETI compared to other cities.
The survey further observed that the median loan-to-value (LTV) ratio moved from 67.7 percent to 69.6 percent between March 2015 and March 2019 showing that banks have become increasingly risk tolerant.
LTV is a measure of credit risk on housing loans.
The survey was conducted in Mumbai, Chennai, Delhi, Bengaluru, Hyderabad, Kolkata, Pune, Jaipur, Chandigarh, Ahmedabad, Lucknow, Bhopal, and Bhubaneswar.Back to latest news