/ -- JLL India Launches Home Purchase Affordability Index
Annual index analyzing affordability trends across key Indian cities
Affordability improved across India's key markets from 2014 to 2018 led by favorable home loan rates Most affordable residential market in 2018 was Hyderabad, followed by Kolkata and Pune Mumbai has rapidly climbed the affordability ladder but yet to cross the affordability threshold Kolkata is likely to overtake Hyderabad to be the most affordable market in 2020
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JLL, India's premier and largest professional services firm specializing in real estate launched its annual Home Purchase Affordability Index (JLL HPAI) today. The Index signifies whether a household earning an average annual income (at an overall city level) is eligible for a housing loan to buy a 1,000 sq ft residential property in the city, at the prevailing market price and home loan interest rate. It is pertinent to note that a reduction in house size may bring in affordability, without decrease in per sq ft pricing. However, this reduction in the size of the apartment may be a compromise on the buyer's side. Hence, it has factored in the saleable area of the house as 1,000 sq ft for a four-member household.
JLL HPAI analyses affordability across India's key seven cities (Mumbai, Delhi NCR, Bengaluru, Chennai, Pune, Hyderabad and Kolkata) for the period 2011 to 2018 and factors in home loan interest rates, average household income and price of a 1,000 sq ft apartment. It is interesting to note that only Hyderabad out of the seven cities covered as a part of our study was affordable in 2013 whereas the situation flipped positively by 2018. In 2018, all the cities except Mumbai crossed the affordability threshold as per JLL HPAI.
JLL HPAI indicates improved affordability across cities
Mumbai Delhi NCR Bengaluru Chennai Pune Hyderabad Kolkata
2011
47
83
113
93
101
140
104
2013
43
65
90
90
90
111
87
2018
84
120
154
155
167
183
174
JLL HPAI of 100 means that a household has exactly enough income to qualify for a home loan. A score of less than 100 means that a household does not have enough to qualify for the home loan. A score higher than 100 implies that the household has more than enough income to qualify for the home loan.
Going ahead, like the national trend, the affordability levels will continue to improve in Mumbai at end of 2021.
JLL HPAI scores to further improve in future
Mumbai Delhi NCR Bengaluru Chennai Pune Hyderabad Kolkata
2019
90
125
158
164
177
187
185
2020
92
125
159
166
182
188
189
2021
94
126
160
167
185
189
193
Ramesh Nair, CEO & Country Head, JLL India says, "In our pursuit to advancing the residential sector to its next level, it is important to understand concepts such as home buyer's affordability which is influenced by various elements. With JLL HPAI, we aim to share a holistic perspective which can act as a feeder into strategic decision making for developers and policy makers."
He added, "Favorable home loan rates backed by stable price have resulted in improved affordability across cities from 2014. JLL HPAIscore of Mumbai has doubled in the last seven years, implying significant increase in in the city. From this point onwards, residential real estate is bound to grow further as we will continue to see robustness in deliveries and offtake in sales."
Samantak Das, Chief Economist and Head of Research & REIS, JLL India says, "As per JLL HPAI, affordability levels will continue to improve over the next three years for all seven cities. Over the same period, we expect a steady increase of 3-5% in property rates and 8-9% increase in average annual household income and home loan interest rates to remain range-bound. As developers align themselves with demand, in terms of quality of products as well as financial viability, sales momentum is likely to pick-up in the next 2-3 years."
For more details, please download JLL Home Purchase Affordability Index.
About JLL India
JLL is India's premier and largest professional services firm specialising in real estate. With an estimated revenue for FY 2018-19 expected to be approx. INR 4,000 crore, the firm is growing from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi and Coimbatore) and over 130 tier II & III markets with a cumulative strength of close to 11,000 professionals.
The firm provides investors, developers, local corporates and multinational companies with a comprehensive range of services. This includes leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, residential, industrial, retail, warehouse and logistics, hospitality, healthcare, senior living and education.
JLL India won the Five Star Award for 'Best Property Consultancy at the International Property Awards Asia Pacific 2018 -19. The Firm was also recognised amongst the 'Top 100 Best Places to Work in India' in 2017 & 2018 in the annual survey conducted by Great Place to Work and The Economic Times. It has also been acknowledged as 'Property Consultant of the Decade' at the 10th CNBC-Awaaz Real Estate Awards 2015. For further information, please visit http://www.jll.co.in.
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