Yamini C S | Edited by Chandrashekar Srinivasan
Bengaluru is the fourth most expensive real estate market in the country, according to a report by consultancy firm Knight Frank that established an ‘affordability index’ for the third quarter of this calendar year. Bengaluru stands at 28 per cent in the index – compared to 26 per cent in the same period last year. The index showed Bengaluru’s affordability had dropped across all markets mainly due to the 50-basis-points hike in the repo rate by the Reserve Bank of India (RBI) in late September.
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The hike in repo rate also led to a rise in median loan rates, which directly affects the affordability of interested buyers and influences consumer behaviour.
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The report studied eight major cities and found that Ahmedabad in Gujarat had maintained its title of ‘the most affordable housing market’ in the nine months from January to September, while Pune in Maharashtra and Tamil Nadu’s Chennai were second and third.
Mumbai and Hyderabad were found to have the most expensive residential markets.
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A report by Today News 24 Businessline quoted Shishir Baijal, Knight Frank India chairman and MD, as saying, “Home affordability, due to the rise in median loan rates has worsened in 2022. Affordability has deteriorated by two per cent points across cities since the rate cycle changed. However, with the need for homeownership still being strong, homebuyers will largely make necessary compromises by considering lower-priced housing units rather than deferring their purchases as expectations of further increases will discourage deferment.”
