The Future of Home Affordability in India - 2024

 

The real estate landscape in India is poised for a positive shift in 2024, with analysts anticipating improved affordability for homebuyers. Despite a steady repo rate since February 2023, Kamaljeet Rastogi, CEO of SahiBnk, warns of potential market changes. Affordability, at a three-year high, faces challenges from escalating property rates overshadowing repo rate fluctuations. Analysts suggest a potential repo rate reduction if inflation falls within the RBI’s target range.


Rahul Mehrotra, CEO of Religare Housing, sees improved affordability in 2024, balancing interest rate hikes with stronger income growth. Pramod Kathuria, CEO of Easiloan, envisions positive changes driven by a potential repo rate reduction, offering prospects for enhanced affordability.



City-wise trends show Mumbai's affordability index dipping, while Kolkata anticipates marginal improvement. Despite 2023's price hikes, an overall minor dip in affordability is attributed to economic prospects and income growth. Anticipated in 2024 is a positive shift, fueled by expectations of a 60-80 basis points repo rate reduction, fostering a favourable lending environment. This, coupled with macroeconomic factors and interest rate reduction, could mark a housing market renaissance.


In essence, the evolving dynamics in the Indian housing market suggest a potential upswing in home affordability in 2024, driven by insightful trends, historical context, and optimistic expectations.


Points to Remember.

1. Affordability is at a three-year high, indicating a positive trend for homebuyers.

2. Analysts anticipate a 60-80 basis points reduction in the repo rate, creating a favourable lending environment in 2024.

3. Despite interest rate hikes, EMIs may be balanced by unchanged repo rate and robust household income growth.

4. City-wise trends vary, with Mumbai expecting a dip and Kolkata foreseeing a marginal improvement in affordability.

5. A focus on macroeconomic factors and interest rate reduction suggests a potential housing market renaissance.

6. Overall, the analysis points to an optimistic upswing in home affordability in 2024, supported by historical context and positive expectations.

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