Rising income levels to optimise home affordability in next 12 months: JLL

Kolkata is estimated to be the most affordable city, while Mumbai may reach near-optimal affordability levels in 2025

The top Indian real estate markets are anticipated to see improved affordability levels by 2025, except for the Delhi National Capital Region (NCR) and Bengaluru, amid expectations of a 50 basis point rate cut and rising household incomes, as per JLL’s Home Purchase Affordability Index (HPAI).

 

This improvement is expected despite a year-on-year (Y-o-Y) decline in affordability since 2022 due to price hikes and stagnant interest rates.

 

According to the index, Mumbai and Pune are projected to approach optimal affordability levels by 2025, while Kolkata is set to maintain its status as the most affordable market.

 

Siva Krishnan, senior managing director (Chennai & Coimbatore) and head of residential services, JLL, said, “The residential real estate market is experiencing a robust bull run, driven by shifting homeownership dynamics and resilient demand despite double-digit price growth and elevated interest rates. The market's upward trajectory has continued, seemingly unaffected by the northward turn in interest rates.”

   

As per JLL, the current market momentum has led to consecutive peaks in sales and an acceleration in project launches. Residential sales are expected to reach 305,000–310,000 units in 2024, with further growth anticipated in 2025, potentially creating a new peak at 340,000–350,000 units.

 

“Looking ahead, the combination of healthy income growth, potential interest rate reductions, and moderating price growth is expected to improve affordability levels over the next 12 months, paving the way for sustained market activity and continued strong performance in India's residential real estate sector in the medium term,” added Krishnan.