According to the survey conducted by the Reserve Bank of India (RBI) since 2010, the housing affordability has worsened over the past four years with Mumbai being the least affordable. 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.
RBI while releasing the survey said that housing affordability has worsened over the past 4 years as the house price-to-income ratio has increased from 56.1 in March 2015 to 61.5 in March 2019. Bhubaneswar is the most affordable city while Mumbai remains the most unaffordable one.
It further said the movement of the 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% to 69.6% between March 2015 and March 2019 showing that banks have become increasingly risk-tolerant.
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.