Hyderabad residential market second most expensive in country: Report

Knight Frank's proprietary ‘Affordability Index’ tracks the EMI trends

If anyone thinks Hyderabad is the most affordable city among the top eight in the country, he or she is mistaken. It has now become the second most expensive city after Mumbai and has even pushed New Delhi to the third position while cities like Bengaluru, Pune, Chennai and Kolkata have become more affordable.

Knight Frank's proprietary ‘Affordability Index’, which tracks the EMI (Equated Monthly Instalment) to income ratio for an average household, showed steady improvement from 2010 to 2021 across the eight leading cities of the country, especially during the pandemic when the Reserve Bank of India (RBI) cut interest rates to decadal lows.

But, with fourth consecutive rate hikes, the home purchase affordability has decreased on an average by 2% across markets and increased the EMI load by 7.4%, said its report, just released.

Hyderabad’s affordability index was 53% in 2010, improved to 33% in 2019. With the advent of the pandemic in early 2020, it further improved to 29% in 2021 and this year’s quarter, shows the index to be at 31%.  Ahmedabad continued to remain the most affordable housing market amongst the top eight cities, with a ratio of 22% followed by Pune at 26% and Chennai at 27%.

In fact, Ahmedabad has consistently been the most affordable city since 2019. From 46% in 2010, it improved to 25% in 2019, 20% in 2021 and stands at 22%. Mumbai remains the most expensive residential market in the country. From 97% in 2010, it improved to 53% in 2020, 57% in 2022.

National Capital Region of Delhi ranks third in being most expensive residential market with affordability index fluctuating from 48% in 2010 to 34% in 2019, then to 26% in 2020, declining to 28% in 2021 and now 30%.  Bengaluru ranks fourth with the index moving from 39% in 2010 to 32% in 2019, 24% in 2020, to 26% in 2021 and now 28%.

Chennai remains the third most affordable residential market with the index moving from 47% in 2010 to 29% in 2019, 25% in 2021 and now at 27%. Pune maintains being second most affordable residential market with the index moving from 45% in 2010, to 28% in 2019, 25% in 2020, 24% and 26% presently.  Kolkata ranks fourth most affordable residential market with the index in the country. From 51% in 2010, it improved to 31% in 2019, 25% in 2021 and stands at 27%.