Home Purchase Affordability Index-2019

Tue, 06/29/2021 - 00:00

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Affordability has been a key issue for homebuyers in India and a vast majority of our population still strive to own a house. The government is committed to achieving the objective of providing houses to all and has taken multiple steps towards the same. To help the government achieve this goal and for the overall advancement of the sector, developers need to realign their strategies not only to take benefit of the government incentives but also address the challenges faced by prospective homebuyers. From a homebuyer's perspective, a purchase decision is based on multiple factors like choice of city, number of members in the family, household income, residential property prices etc. However, affordability is the cornerstone of this decision. It hence becomes very important to scrutinize the concept of affordability, factors that influence it and a homebuyer's overall financial appetite. Affordability at the household level depends on three pivotal factors - property price, income and housing loan interest rate The trends in affordability can be an important feeder into the strategic decision making of real estate developers and policy makers. Government interventions in the form of fiscal and non-fiscal incentives to developers and homebuyers are targeted towards attaining the larger objective of 'Housing for All' and is time-bound in nature. We thus believe that the outlined factors such as income, property price and home loan interest rates will always have a significant bearing in assessing the affordability of homebuyers. With real estate getting regulated and transparent coupled with favourable macro-economic indicators, enhanced affordability of homebuyers will be instrumental in fueling higher sales in the sector.
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