According to JLL(Jones Lang LaSalle Inc)’s report on the Home Purchase Affordability Index (HPAI), it is anticipated that home buying affordability will see a positive shift in 2024. This projection is based on the expectation of a 60-80 bps repo rate throughout the year.
As a result, this adjustment is poised to maintain buyers’ affordability well within a comfortable range, ensuring ongoing market momentum in the upcoming year.
This blog will explain how it can impact on the home buyer’s purchase manner and how it can impact on the improvement of the real estate market of India.
What is JLL’s Latest Report on Real Estate Market?
JLL’s report on the Home Purchase Affordability Index (HPAI) anticipates an enhancement in the affordability of home purchases in 2024. This forecast is based on the expectation of a 60-80
basis points reduction in the repo rate during the year. This adjustment is projected to maintain buyers’ affordability at a highly comfortable level, ensuring sustained market momentum in the upcoming year.
During 2023, although India wasn’t entirely shielded from global disruptions. The country witnessed an improvement in domestic inflation levels. Furthermore, India’s economic growth surpassed that of other nations, granting ample leeway for the central bank to uphold the status quo for a significant portion of the year.
The residential real estate market responded remarkably well to these conditions, with sales for the initial nine months of 2023 reaching approximately 90% of the total sales for the entirety of 2022.
Affordability for buying homes in India dropped in 2022, marking the first decrease in ten years after reaching its highest point the year before. India’s central bank responded to global economic and increasing interest rates by raising by 225 repo rate basis points between May and December 2022, followed by an additional 25 basis points increase in February 2023.
On this note, Siva Krishnan, MD and head of residential services, India, JLL, said, “Despite residential price hikes being sustained in 2023, better economic and job prospects and healthier income growths compared to 2022 have led to a relatively minor dip in affordability in 2023. In fact, affordability levels remain much above the pre-COVID and worst affordability periods for all cities, clearly highlighting the headroom for market growth to continue.”
Kolkata is the Most Affordable Residential Market in India
Kolkata continues to hold its position as the most affordable housing market among India’s top seven cities. This trend is anticipated to persist in both 2023 and 2024. Pune is projected to follow suit, alongside Hyderabad, showing relatively stronger HPAI (Housing Price Affordability Index) scores in 2024 while maintaining levels similar to those of 2022 in 2023.
Although all cities are expected to remain below their peak affordability levels observed in 2021, they will notably exceed their previous lows. Consequently, robust market activity is foreseen to continue until the conclusion of 2024.
It can be said that 2024 is going to witness the most affordable real estate market trend. There are upcoming industrial projects in Kolkata that are starting to hand over to home buyers. If you are looking for new 3 BHK/ 2 BHK flats in Kolkata, contact Srijan Realty, a reputed real estate developers in Kolkata.
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