Mumbai, India’s most expensive property market, showed the maximum improvement in affordability among top eight cities, along with a reduction in average home sizes since 2010, property advisory Knight Frank India’s latest Affordability Index showed. The report, which assesses the affordability of homes, said average home sizes in Mumbai have shrunk by 24%.

While it still remains India’s most expensive housing market and the least affordable, the report estimated that a house will cost around seven times the annual household income, against 11 times in 2010.

This figure has come down to five times for the National Capital Region (NCR) and Hyderabad, compared with six times in 2010. In Bengaluru, it was four times in 2018 from six in 2010.

Considering that "ideal affordability" is identified at 4.5 times the average annual household income in a city, barring Mumbai (7), NCR (5) and Hyderabad (5), all other markets are below the benchmark. Mumbai, while still recording the highest ratio, has experienced the sharpest improvement since 2010.

The fall in home prices to income ratio in all eight cities, including Mumbai, NCR, Bengaluru, Kolkata, Chennai, Ahmedabad, Hyderabad and Pune, signals rising affordability, on the back of a correction in property prices and a reduction in home sizes.

The fall in home prices to income ratio in all eight cities, including Mumbai, NCR, Bengaluru, Kolkata, Chennai, Ahmedabad, Hyderabad and Pune, signals rising affordability, on the back of a correction in property prices and a reduction in home sizes.

“This indicates that prices have corrected significantly while income has grown at a slow base. Prices per square foot may not have dropped drastically, but majority (60%) of the new supply of housing stock coming in is in the affordable range along with reducing home sizes," said Arvind Nandan, executive director-research, Knight Frank India.

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