India’s affordable housing dream hits a luxury roadblock
Published by India Today
Abhishek Kumar's role: Quoted
Abhishek Kumar said property prices in Tier 1 cities are outpacing salary growth. He cautioned that many buyers stretch EMIs well beyond 30-40% of take-home pay, and advised counting the full cost of buying and protecting retirement and emergency savings.
What Abhishek Kumar said
Is buying a home in a big city getting harder for salaried people?
In my view, yes. Property prices in Tier 1 cities are rising faster than the pay of typical salaried workers. At the same time, far fewer budget housing projects are being launched, and developers are putting their focus on luxury projects that earn them higher margins. Together, these have sharply reduced the affordable choices left for middle-income buyers.
How much of my take-home pay should go towards the home loan EMI?
We generally suggest keeping home loan EMIs at 30% to 40% of your net income each month, or less. Many buyers in cities are stretching to half or more of their take-home pay, often by choosing the longest tenure or dipping into retirement savings and emergency funds. That leaves the household heavily leveraged and exposed if income stops, a health emergency hits or floating rates move up.
Beyond loan eligibility, what should I check before buying a home?
I would not look only at how much the bank will lend. Add up everything you will pay from your own pocket to buy the home, including stamp duty, registration fees, loan processing charges and the interior work you will need straight away. Then make sure the mortgage payments will not come at the cost of your retirement savings, your emergency fund and other long-term goals.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on money management
The article examines why developers in India are favouring high-end projects even though the need for affordable homes remains large. It covers thin developer margins in budget housing, an unchanged ₹45 lakh price cap, stalled projects needing funds, and how salaried middle-class buyers are being squeezed.
Publisher source
India’s affordable housing dream hits a luxury roadblock