India Markets close in 2 hrs 11 mins

Mumbai least, Bhubaneswar most affordable city; check what RBI’s latest residential survey says

Samrat Sharma
Union Budget 2019 India, Budget 2019-20

The housing affordability worsened over the past four years, even as banks have become increasingly risk intolerant, the Reserve Bank of India (RBI) said in its latest quarterly residential asset price monitoring survey released Thursday. While Mumbai continues to be the least affordable city, Bhubaneswar remains the most affordable city in terms of Median House Price to Monthly Income in India.

"Housing affordability worsened over the past 4 years as the house price-to-income (HPTI) ratio increased from 56.1 in March 2015 to 61.5 in March 2019," the RBI said while releasing the survey.

Since July 2010, the central bank is conducting the survey on housing loans given by banks and housing finance companies across 13 cities including Mumbai, Chennai, Delhi, Bengaluru, Hyderabad, Kolkata, Pune, Jaipur, Chandigarh, Ahmedabad, Lucknow, Bhopal and Bhubaneswar. 

“Higher input cost of manpower and raw materials are to blame for the increasing unaffordability of the houses. Another reason for rising housing costs is the absence of the single-window system, which increases the time and cost of procurement of the property”, Shweta Bharti, General Secretary, NEFOWA told Financial Express Online.

Highlights of survey

The median loan-to-value ratio stands at 69.6 per cent in March 2019 as against 67.7 per cent in 2015, the report also said. 

Median EMI-to-income ratio has remained relatively steady during the past two years, it added.

Mumbai scored 74.4 while Bhubaneswar got 54.3.

Chennai, Delhi, Bengaluru, Hyderabad, Kolkata, Pune, Jaipur, Chandigarh, Ahmedabad, Lucknow and Bhopal got scores of 58.6, 58.5, 56.1, 60.3, 56.5, 66.6, 55.9, 63.4, 70.4, 58.6 and 56.2 respectively.

Another finding of the survey is that the median EMI-to-income (ETI) ratio, representing loan eligibility, has remained relatively steady during the past two years. However, Mumbai, Pune and Ahmedabad recorded higher median ETI compared to other cities.

It further said the movement of median loan-to-income (LTI) ratio also confirms worsening housing affordability.