Affordability levels of Housing markets set to improve in 2025

JLL’s Home Purchase Affordability Index predicts that affordability levels across key housing markets will improve by 2025. The sales may surpass 3.10 lakh units in the year 2024.

According to JLL's Home Purchase Affordability Index (HPAI), most real estate markets across the country, especially Mumbai and Pune, are expected to reach optimal affordability levels by 2025, with a projected interest rate cut on the horizon. Kolkata is expected to maintain its status as the most affordable market, potentially hitting new peaks.

It is anticipated that Mumbai and Pune will attain their peak affordability levels by 2025, indicating that their qualifying income level will be sufficient or close to sufficient to make a household eligible for a home loan based on the average home prices and household incomes of the cities. It is anticipated that Kolkata will attain new levels of affordability by 2025, thereby maintaining its status as India's most affordable major residential market.

It noted that affordability levels in Delhi NCR and southern markets like Bengaluru, Hyderabad, and Chennai are likely to improve year over year, although they remain below their peak values.

Despite domestic economic forecasts indicating a slight dip in growth, India is projected to remain the most robust large economy globally, thereby facilitating the growth of household incomes. According to Samantak Das, Chief Economist and Head of Research & REIS, India at JLL, the HPAI report indicates that while affordability levels reached their peak in 2021 across all markets, the escalating prices and persistent interest rates resulted in a decline through 2022 and 2023.