Housing affordability worsened over 4 years: RBI Survey


Housing affordability has worsened in the last four years with Mumbai being the least affordable, a Reserve Bank of India (RBI) survey stated.


The RBI has been conducting a quarterly Residential Asset Price Monitoring Survey (RAPMS) since July 2010 on housing loans disbursed by select banks and housing finance companies (HFCs) across 13 cities.

The central bank said while releasing the survey that, “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.”

Mumbai remains the least affordable city in India, while Bhubaneswar remains the most affordable city.

It further said the movement of median loan-to-income (LTI) ratio also confirms worsening housing affordability as it moved from 3 in March 2015 to 3.4 in March 2019.

The survey also said the median loan-to-value (LTV) ratio moved from 67.7 percent to 69.6 percent between March 2015 and March 2019 showing that banks have become increasingly risk tolerant.

LTV is a measure of credit risk on housing loans.

Another finding of the survey is that the median EMI-to-income (ETI) ratio, representing loan eligibility, has remained relatively steady during the past 2 years.

However, Mumbai, Pune, and Ahmedabad recorded a higher median ETI compared to other cities.

(With Agency inputs)


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