Affordability of Homes in India has increased: HDFC
Cost of apartments in India has increased as well as the rate of interest on housing loans in last couple of decades. But according to the HDFC Ltd, the affordability of purchasing a home in India also has been increased.
In an analysis the financial institution has found that a home buyer, on an average, needed an amount equivalent to nearly 22 times his or her annual income in 1995, but now an amount less than five times of the annual earning was required for purchasing a house.
The affordability ratio has been declined to 4.6 in the fiscal year ended March 31, 2012, from as high as 22 in 1995. This means the annual income of the home buyer along with the price of the house has increased.
According to the analysis, despite a steady rise in property prices over the years, the income levels have also raised during the period along with added tax benefits on housing loans.
The HDFC limited thinks that as long as that ratio stays in the range of 4.2-5.5, housing loan demand will be there.
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Source: Hindustan Times
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