Hyderabad remains 2nd most expensive residential housing market in India

Hyderabad: Hyderabad is the second most expensive residential market in the country, according to the latest Affordability Index report released by Knight Frank India. The city’s affordability ratio stood at 30 per cent (the same level as in 2023) in January to June (H1) 2024 period.

The affordability ratio for Hyderabad, a comparison of the EMI to income, stood at 47 per cent in 2010, which dropped to 34 per cent in 2019, and further 31 per cent in 2020. It reached its lowest in 2021 at 28 per cent. The ratio has been at 30 per cent from 2022.

According to the report, Ahmedabad is the most affordable housing market among the top eight cities, with a ratio of 21 per cent, followed by Pune and Kolkata at 24 per cent each. Mumbai was the only city that remained marginally higher than the threshold at 51 per cent.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said: “Stable affordability is essential to sustaining homebuyer demand and sales momentum, which, in turn, acts as a key economic driver for the country. As income levels rise and economic growth strengthens, end-users’ financial confidence is significantly bolstered, encouraging them to make longer-term financial commitments toward asset creation.”

The CMD further said that given the RBI’s healthy 7.2 per cent GDP growth estimate for FY 2025, and a stable interest rate scenario, income and affordability levels are expected to continue to support homebuyer demand in 2024.

The report mentioned that residential prices have grown in Hyderabad as a result of robust sales volumes. The price grew by five per cent year-on-year with an average price of Rs 5,681 per sft in first half of 2024. Since 2019, the price has shot up by 26 per cent in the city, wherein in 2010 the price was Rs 2,728 per sft.

Knight Frank India’s Affordability Index, which tracks the EMI (Equated Monthly Installment) to income ratio for an average household, witnessed steady improvement from 2010 to 2021 across the eight leading cities of India. As the REPO rate has remained steady since February 2023, healthy income growth has helped counteract rising prices and comparatively high interest rates, bringing affordability back to the current level. The stable interest rate scenario is expected to sustain in the near term, as economic growth continues to remain on track, Knight Frank India mentioned in its official release.