Housing may be perceived to have gotten very expensive at the present sky high levels. But data compiled by Indian major mortgage company HDFC, shows that house prices are near their most affordable level in over 3 decades (30 years).
The house prices have indeed been rising for above ten years, except for a temporary slump in 2009. But the affordability of purchasing a house has been mostly on a declining trend for almost 2 decades now, as per HDFC data.
This affordability ratio, which takes into account the annual income of the home buyer along with the price of the house, declined to 4.6 in the previous financial year 2011-12, ended March 31, from as high as 22 in the year 1995.
This means that a house 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 5 times of the annual earnings was required for purchasing a house.
This affordability ratio, which takes into account the annual income of the home buyer along with the price of the house, declined to 4.6 in the previous financial year 2011-12, ended March 31, from as high as 22 in the year 1995.
This means that a house 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 5 times of the annual earnings was required for purchasing a house.
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