News release

Affordability to rise to a 3-year high in 2024, on expectations of interest rate cuts: JLL HPAI

Kolkata, Pune and Hyderabad to be most affordable in 2023 and 2024

December 06, 2023

Anil Grover

Mumbai, December 6, 2023: The affordability for home purchases is expected to improve for the better in 2024, basis the expectation of a 60-80 bps repo rate cut during the year, says JLL’s report on the Home Purchase Affordability Index (HPAI). This will keep buyers’ affordability within a very comfortable range and sustain the momentum in the market over the next year as well.

In 2023, while India wasn’t fully insulated from global shocks, improving domestic inflation levels and India’s economic growth outpacing the rest of the world gave enough headroom to the central bank to maintain status quo through a large part of the year. The response from the residential markets was spectacular, as sales for the first nine months of 2023 rose to ~90% of the full-year figures of 2022.

The affordability levels for home purchase in India saw a decline in 2022 for the first time in a decade having hit peak affordability levels in the previous year. Global recessionary winds and rising interest rates saw India’s central bank raising the repo rate by 225 bps from May till December 2022. And a further 25 bps hike was done in February 2023.

The strong residential price growth over the past 12 months amid sticky interest rates did weaken affordability levels but didn’t act as a momentum-inhibitor, says the report.

“We are in the middle of a sustained bull run with buyers continuing to access primary residential markets. Homebuyers look at multiple factors including but not limited to the prevailing economic scenario and future expectations of income and inflation. Also, employment market prospects, income & job stability and current & future savings targets are equally critical when making home purchase decisions. Despite residential price hikes being sustained in 2023, better economic and job prospects and healthier income growths compared to 2022 have led to a relatively minor dip in affordability in 2023. In fact, affordability levels remain much above the pre-COVID and worst affordability periods for all cities, clearly highlighting the headroom for market growth to continue”, said Siva Krishnan, Managing Director and Head of Residential Services, India, JLL.

Affordability was at its lowest in 2013 before rising on a sustained basis through 2014 to hit optimal levels in 2021. In fact, barring Hyderabad, one couldn’t buy a full 1,000 sq ft apartment in any of the top seven cities with the requisite budget and home loan amount in 2013.

Mumbai became an affordable market with its threshold hitting 100 in 2021. It has since slipped below the threshold value of an affordable market but is likely to retain its current affordability and even slightly improve upon it in 2024.

Kolkata, Pune and Hyderabad to remain most affordable

While Kolkata remains the most affordable residential market in India among the top seven cities, it is likely to maintain its top billing through 2023 and 2024. Pune is expected to follow along with Hyderabad, with relatively better HPAI scores in 2024 and 2023 remaining similar to 2022 levels. All cities will remain lower than their highest affordability levels seen in 2021, but much higher than their previous lows. Thus, they are likely to see robust market activity prevail to the end of 2024.

Dr. Samantak Das, Chief Economist, and Head of Research and REIS, India, JLL said, “Robust economic fundamentals and improvement in worldwide economic growth prospects, could see the interest rate cycle reverse mildly. This would have a massive impact on affordability levels in 2024. On our prediction of a 40bps interest rate cut, affordability is expected to be better and second only to the 2021 peak affordability levels. This would continue to support the residential markets’ run. In fact, even no change to current interest rate levels would keep affordability at the same levels or improving marginally in select markets, as incomes and economy both look to remain growth-oriented in the next year.”

“Economic activity aiding household income growth and an improvement in affordability through policy interventions has truly shown that demand elasticity will sustain over a prolonged period. The synchronization between policymakers and market participants needs to sustain to ensure that the bull run continues,” he added.

Approach and Methodology of JLL Home Purchase Affordability Index (HPAI)

JLL Home Purchase Affordability Index (HPAI) signifies whether a household earning an average annual income (at an overall city level) is eligible for a housing loan on a property in the city, at the prevailing market price. We have derived this index, through a combination of variables which include home loan interest rates, average household income and price of the residential apartment. The interplay between property price, income and home loan interest rates influences the ability of a household to afford a home purchase. The cost of the property is further determined by the per sq ft price prevailing in the city and the average area of the apartment. It is pertinent to note that a reduction in house size may bring in affordability, without decrease in per sq ft pricing. However, this reduction in the size of the apartment may be a compromise on the buyer’s side. Hence, we have kept the saleable area of the house as 1,000 sq ft for a four-member household.

About JLL

For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 106,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of close to 12,000 professionals. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit