Mumbai: It’s the dream of every young adult to own a home. With Indians’ aspirations and ambitions growing, it’s no surprise that the real estate market is booming.
However, homes in India’s big cities are becoming unaffordable, even for the wealthy, two reports have revealed.
According to the ‘Trend and Progress of Housing in India’ report by the National Housing Bank (NHB) and the ‘Household Consumption Expenditure Survey Factsheet’ of the National Sample Survey Office (NSSO), acquiring property is most difficult in Mumbai and Gurugram for the top 5 per cent in income category.
Mumbai is the least affordable city, as it requires 109 years of savings for a Rs 3.54 crore home, even for those saving Rs 10.7 lakh annually. In Gurugram, a Rs 2.26 crore home requires 64 years at Rs 11.7 lakh savings per year.
As for Bhubaneswar, data shows that top earners have to save for 53 years – Rs 2.3 lakh savings per year — to buy a house priced at Rs 1.2 crores.
NHB’s Residential Property Price Index (RPPI) tracks the cost of a 110 square metre (1,184 square foot) house/apartment in various cities. NSSO’s Household Consumption Expenditure Survey (HCES) 2022-23 provides income data for urban households, including the richest 5 per cent.
Based on a 30.7 per cent savings rate taken as standard, a report by CEIC Data, Business Standard calculated how long it takes to afford a home in different cities.
While Mumbai, Gurugram and Bhubaneswar are at the top end of the spectrum, buying a home in Chandigarh is much more affordable. An apartment costing Rs 78 lakh will take 15 years to buy if one has Rs 17.4 lakh in annual savings in Chandigarh.
Some of the other affordable cities are Chandigarh (15 years) and Jaipur (16 years).
