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Affordable Homes to be at the center stage in 2024!

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In the unfolding narrative of India’s real estate sector, the spotlight is poised to shine brightly on the affordability of homes in 2024. According to the latest real estate news, cities like Kolkata, Pune, and Hyderabad are anticipated to lead the charge as the most affordable destinations for homebuyers in the upcoming years. The report paints a promising picture for real estate in 2024 and provides a glimpse into the factors shaping this optimistic outlook. A key catalyst for this positive shift is the expectation of a significant 60–80 basis point repo rate cut during the year. This foresight positions 2024 as a pivotal moment, ushering in improved affordability poised to keep buyers’ comfort levels high and sustain the market’s momentum throughout the year.


The affordable housing landscape encountered a setback in 2022, witnessing its first decline in a decade after achieving peak levels in the preceding year. This downturn was a consequence of global recessionary winds and escalating interest rates, prompting the central bank to raise the repo rate by 225 bps from May to December 2022, with an additional 25 bps hike in February 2023. Despite these challenges, the affordable homes market exhibited remarkable resilience, showcasing sustained price growth and robust sales for the first nine months of 2023, amounting to approximately 90% of the full-year figures of 2022.

In the throes of 2013, the affordability of homes hit rock bottom before embarking on a consistent upward climb through 2014, culminating in its peak in 2021. Notably, except for Hyderabad, procuring a complete 1,000-square-foot apartment in any of the top seven cities within the available budget and home loan amount was an insurmountable challenge in 2013.

Fast forward to 2021, and Mumbai emerged as a beacon of affordable housing, surpassing the threshold value of 100. However, it has experienced a slight dip below this threshold since then. The latest real estate news for affordable houses in Mumbai is that it is anticipated to sustain its current affordability and may even witness a modest improvement in 2024.


Despite the challenging period from late 2021 to mid-2022, where a perfect storm of stable home prices and low-interest rates collided with recovering incomes, affordability faced headwinds. However, the residential sector has experienced an upward trajectory ever since, despite facing the strongest price increases in over a decade and an upswing in interest rates due to global economic challenges.

The sustained growth in residential markets can be attributed to home lending rates remaining significantly below decadal highs, supported by resilient buying behavior. The gains observed in 2022 have continued to strengthen in 2023, with household incomes expected to rise faster, buoyed by robust economic output growth, positioning India as one of the fastest-growing nations globally.

While residential prices have seen near-double-digit growth across all markets in 2023, future growth is anticipated to be moderate, maintaining overall market momentum. Despite the potential for affordability and housing levels to worsen due to the trajectory of prices, the stronger growth in income serves as an effective buffer. Although the repo rate trajectory might be influenced by global economic signals, the robust domestic economy is expected to absorb any impact and potentially lead to a rate cut in 2024.

In summary, despite the weaker affordability markers in 2023, buyers seem largely unaffected, thanks to a combination of factors such as stronger income growth acting as a buffer and the overall positive economic outlook, indicating the market’s resilience and ability to sustain momentum.


The Home Purchase Affordability Index (HPAI) is a metric for gauging the balance between average and eligible household incomes, with eligibility defined as the minimum income required for a home loan on a 1,000-square-foot apartment at prevailing market rates.

  • A value of 100 indicates precise eligibility for a loan.
  • A value below 100 signifies insufficient income for housing loan qualification.
  • A value exceeding 100 suggests surplus income for home loan eligibility.

Examining affordability across major markets reveals a historical trajectory. In 2013, all cities faced the lowest affordability, particularly Mumbai, where the average household income barely covered a home loan for less than half of a 1,000-square-foot apartment. Subsequent years witnessed a significant improvement until 2021, reaching peak levels conducive to home purchases.

Forecasts for real estate in 2024 suggest that inflation within the lower range of the RBI’s target will likely prompt a repo rate cut. With favorable economic conditions supporting income growth, affordability is expected to improve, ranking second only to the peak observed in 2021. This positive outlook aims to maintain buyers’ affordability within a comfortable range, ensuring sustained growth in the residential market over the coming year.


The historical trajectory of home purchase affordability in Indian cities focuses particularly on the period from 2013 to the anticipated trends in 2024. In 2013, affordability was at its lowest point, especially in Mumbai, where the average household income was insufficient to secure a home loan for even half of a 1,000-square-foot apartment. The situation improved significantly from 2014 to 2021, characterized by peak affordability levels, creating a favorable environment for home purchases.

The impact of the COVID-19 pandemic in 2020 led to a temporary decline in household incomes due to salary cuts and job losses. However, by 2021, economic activity had resumed, contributing to the recovery of household incomes. During this period, residential prices followed a trajectory similar to pre-COVID levels but with a downward trend, thanks to developers offering discounts and government incentives, resulting in an effective price cut of 1-3%.

The narrative shifts to 2022, marked by the rising repo rate in response to global recessionary and inflationary trends. Moving forward to 2023, the paragraph suggests that affordability levels may marginally worsen or remain stable across cities. The stagnancy in repo rate movement, declining inflation, and comparatively robust growth in household incomes have played a role in offsetting the impact of a stronger increase in prices.

Looking ahead to real estate in 2024, there is an optimistic outlook for a renaissance in affordability levels. This is expected to be driven by macroeconomic fundamentals supporting a potential reversal in the repo rate and subsequent reduction in interest rates, providing an additional boost to the residential sales market.


Despite a faster rise in prices during 2023, the decision to keep the repo rate unchanged has supported market momentum, preventing a significant decline in affordability. Looking ahead to 2024, there is optimism for improved affordability, driven by expectations of a 60–80 basis point repo rate cut during the year. The anticipated stable mortgage rates, coupled with positive economic prospects, growth forecasts, and a potential reversal of global recessionary trends, are expected to contribute to a comfortable affordability range for buyers, sustaining market momentum in the coming year.

Mumbai’s Affordability Outlook: Steady Despite Marginal Decline           

The affordability of Mumbai is projected to remain within a defined range, slightly lower than optimal levels. Mumbai’s journey, starting from an HPAI low of 43 in 2013, has seen significant improvement. It achieved the status of an affordable market in 2021, reaching an HPAI score of 100. Although it has marginally slipped below the threshold, Mumbai is anticipated to sustain its current affordability and even experience a slight improvement in 2024.

Affordability Dominance: Kolkata, Pune, and Hyderabad Lead the Way    

Kolkata continues to hold the title of the most affordable homes market among India’s top seven cities. This trend is expected to persist through 2023 and 2024. Pune and Hyderabad are anticipated to follow suit, with relatively better Home Purchase Affordability Index (HPAI) scores in 2024, maintaining levels similar to 2022. Although all cities will remain below their peak affordability observed in 2021, they are poised to stay significantly higher than previous lows, ensuring robust market activity throughout 2024. 


The resurgence of affordable homes in 2024, particularly in the context of Gurgaon real estate, owes much to the instrumental role played by the Real Estate Regulatory Authority (RERA). As a guardian of transparency and fairness, RERA has significantly impacted the affordability index by introducing measures that ensure the timely completion of projects and prevent the diversion of funds. The stringent regulations imposed by RERA have bolstered homebuyers’ confidence, making them more inclined towards affordable homes options. Developers, cognizant of the importance of compliance, are aligning their projects with RERA guidelines, contributing to the overall improvement of the affordability index in Gurgaon. This collaborative effort between RERA and developers is proving to be a driving force behind the resurgence of affordable homes, positioning them at the center stage of the Gurgaon real estate narrative in 2024.


The real estate sector in India for 2024 is marked by a positive shift in affordability, driven by the expectation of a significant repo rate cut. Despite challenges in 2022, the market displayed resilience, with sustained growth in prices and robust sales in the first nine months of 2023. Buyers, despite weaker affordability markers, remain largely unaffected due to factors such as stronger income growth and a positive economic outlook.

The Home Purchase Affordability Index (HPAI) reflects a historical trajectory with an optimistic outlook for 2024. Despite a marginal decline, Mumbai’s affordability outlook remains steady, and cities like Kolkata, Pune, and Hyderabad are anticipated to lead in affordability dominance among India’s top seven cities. In summary, the delicate interplay of economic factors and market forces sets the stage for a promising real estate sector in 2024, characterized by improved affordability and sustained market momentum.

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