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Business Standard
4 days ago
- Business
- Business Standard
Dream home is hard to get: 109 yrs of savings needed to buy one in Mumbai
The real estate market is booming but homes in India's largest cities are becoming unaffordable, even for the wealthy, according to two major reports. In Mumbai and Gurugram, the top 5 per cent in income class have to save money for decades to buy a standard home, according to the 'Trend and Progress of Housing in India' report by the National Housing Bank (NHB) and the Household Consumption Expenditure Survey Factsheet' of the National Sample Survey Office (NSSO). NHB's Residential Property Price Index (RPPI) tracks the cost of a 110 square metre (1,184 square foot) house in various cities. NSSO's Household Consumption Expenditure Survey (HCES) 2022-23 provides income data for urban households, including the richest 5 per cent. Assuming a 30.7 per cent savings rate, as reported in 'India Gross Savings Rate', a report by CEIC Data, Business Standard calculated how long it takes to afford a home. Here's what the data shows for key cities: City House Price (in lakh) Annual Savings (in lakh) Years to Buy Mumbai 354 10.7 109 Gurugram 226 11.7 64 Bhubaneswar 120 2.3 53 Patna 81 6 45 Kolkata 97 8.2 39 Ahmedabad 94 8.1 38 Chennai 113 10.2 37 Bengaluru 115 10.4 36 Delhi 135 12.7 35 Lucknow 79 7.9 33 Dehradun 70 9.4 30 Ranchi 68 7.7 29 Guwahati 73 8.3 27 Thiruvananthapuram 87 10.9 26 Bhopal 57 7.2 26 Vizag 67 8.7 26 Raipur 50 6.5 25 Hyderabad 89 12.5 23 Ludhiana 55 7.9 23 Jaipur 45 9.3 16 Chandigarh 78 17.4 15 Mumbai is the least affordable city, requiring 109 years of savings for a Rs 3.54 crore home, even for those earning Rs 10.7 lakh annually. Gurugram follows, with a Rs 2.26 crore home requiring 64 years at Rs 11.7 lakh savings per year. Chandigarh is relatively affordable: a home costing Rs 78 lakh will take 15 years to buy if one has Rs 17.4 lakh in annual savings. Mumbai and Gurugram Housing demand in Mumbai outstrips supply. A 110 square metre home, which will be a modest 2BHK apartment, costs Rs 3.54 crore. Even the top 5 per cent, those with an estimated monthly per capita expenditure of Rs 22,352 (according to NSSO data), will struggle. Gurugram, a corporate hub near Delhi, is growing rapidly and the same-sized home costs Rs 2.26 crore. These cities highlight a broader trend: job-rich urban centers are pricing out even high earners. What does this mean for your finances? For middle class families, owning a home in Mumbai or Gurugram is difficult. Young professionals starting their careers face an even steeper climb. Planning to buy a home reshapes personal finance in several ways: Many may need to settle for smaller homes or live on rent for long. Loan dependence: Taking a home loan means high interest rates and long tenures increase financial strain. The NHB notes that housing loans reached Rs 33.53 trillion by September 2024, up 14 per cent year-on-year. More affordable cities like Chandigarh, Jaipur (16 years to repay a loan), or Hyderabad (23 years) may attract talent, but job opportunities often tie people to expensive hubs. This situation also affects long-term goals. Saving for a home can crowd out other priorities like retirement or education, forcing families to rethink their budgets. Broader implications The affordability gap isn't just a personal finance issue; it's a societal one. High prices in cities like Mumbai and Gurugram could slow urban economic growth, as workers struggle to settle. The NHB report highlights regional disparities in housing finance: southern states (35 per cent) and western states (30 per cent) dominate loan distribution, while north-eastern states get just 0.68 per cent. This uneven access worsens the crisis in high-cost areas. Government schemes like Pradhan Mantri Awas Yojana (PMAY) aim to boost affordable housing, but their impact in premium cities is limited. The NHB's RESIDEX index shows a 6.8 per cent price rise in Q3 2024, suggesting costs will keep climbing without major policy shifts. Looking ahead For individuals, navigating this crisis requires smart planning. Start saving early, even if it's a small amount. Explore suburbs or tier-2 cities where prices are lower. If loans are unavoidable, compare rates and opt for shorter tenures to minimize interest. Government subsidies under PMAY can help, especially for first-time buyers.
IOL News
13-06-2025
- Business
- IOL News
Understanding the 5. 2 percent rise in South Africa's residential property price inflation for January 2025
Stats SA reports a modest increase in residential property price inflation across Mzansi. Image: Simphiwe Mbokazi The annual national residential property price inflation was 5.2% in January 2025, an increase from a revised 5.1% in December 2024. This is according to the Residential Property Price Index January 2025, released by Statistics South Africa (StatsSA) on Thursday. The data showed that the residential property price index (RPPI) increased by 0.4% month-on-month in January 2025. 'The main contributors to the 5.2% annual national inflation rate were Western Cape (8.7% and contributing 3.3 percentage points) and Gauteng (2.3% and contributing 0.9 of a percentage point). The RPPI for all metropolitan areas increased by 5.0% between January last year and January this year. The main contributors to the 5.0% annual inflation rate for metropolitan areas were City of Cape Town (8.5% and contributing 3.1 percentage points) and City of Johannesburg (2.3% and contributing 0.5 of a percentage point). The annual national residential property price inflation is generally a positive indicator for the local property market, says Dr Farai Nyika, an academic at the Management College of Southern Africa(MANCOSA). He said both property developers and existing homeowners depend on, and benefit from, sustained price inflation to realise returns on their long-term investments. However, he said that one significant consequence of rising property values is that municipalities periodically revalue properties, which often results in higher property rates for owners. 'For prospective property investors, it is important to note that real returns are only achieved when property price inflation exceeds the annual consumer inflation rate, inclusive of all associated costs (such as rates, taxes, maintenance, and transaction fees). Rising property prices also stimulate demand in related industries, including hardware suppliers, cement producers, and manufacturers of construction materials. This, in turn, supports job retention and the creation of new employment opportunities, which is particularly important in the context of South Africa's challenging economic climate,' Nyika said. The academic said that conversely, Cape Town is increasingly becoming unaffordable for many first-time buyers, placing them at risk of becoming perpetual renters. He said as people tend to 'vote with their feet', the city - despite being an attractive and desirable destination - continues to reinforce generational divisions along the lines of income and property affordability. The RPPI for properties sold for the first time increased by 6.0% between January 2024 and January 2025. The index increased by 0.3% month-on-month in January 2025. The RPPI for resold properties increased by 5.9% between January 2024 and January 2025. The index increased by 0.4% month-on-month in January 2025. The RPPI for sectional title properties increased by 3.1% between January 2024 and January 2025. The index increased by 0.4% month-on-month in January 2025. The RPPI for freehold properties increased by 7.1% between January 2024 and January 2025. The index increased by 0.5% month-on-month in January 2025. In a property note released this week, FNB said that looking ahead, the recent series of interest rate cuts is expected to mildly strengthen market conditions in 2025 compared to 2024. However, the bank said that a strong and sustained recovery will depend on achieving significantly improved economic growth. FNB added that it forecasts modest improvement, with growth rising from 0.5% in 2024 to 1.1% in 2025, and reaching 1.9% by 2027. It said it also anticipates that interest rates will likely move sideways for a protracted period following one more expected 25-basis-point cuts in the second half of 2025. While this expected mild improvement in the economic and interest rate environment is welcome, FNB said it may not be sufficient to support sustained real (inflation-adjusted) growth in property income and capital values through the forecast period to 2027. Independent Media Property
IOL News
08-05-2025
- Business
- IOL News
South Africa's residential property prices surge: 5. 0% inflation recorded in December 2024
A residential property that was for sale in Marlberton, South of Johannesburg. Image: Simphiwe Mbokazi South Africa's annual national residential property price inflation was 5.0% in December last year, an increase from 4.9% in November 2024. This is according to the Residential Property Price Index (RPPI) December 2024, released by Statistics South Africa on Thursday, which shows that the residential property price index (RPPI) increased by 0.4% month-on-month in December 2024. 'The main contributors to the 5.0% annual national inflation rate were Western Cape (8.6% and contributing 3.1 percentage points) and Gauteng (2.3% and contributing 0.9 of a percentage point),' it read. The RPPI for all metropolitan areas increased by 4.8% between December 2023 and December 2024. The main contributors to the 4.8% annual inflation rate for metropolitan areas were said to be City of Cape Town (8.1% and contributing 2.7 percentage points) and City of Johannesburg (3.4% and contributing 0.7 of a percentage point). The RPPI for properties sold for the first time increased by 5.2% between December 2023 and December 2024. The index increased by 0.5% month-on-month in December 2024. The RPPI for resold properties increased by 5.3% between December 2023 and December 2024. The index increased by 0.5% month-on-month in December 2024. The RPPI for sectional title properties increased by 3.4% between December 2023 and December 2024. The index increased by 0.4% month-on-month in December 2024. The RPPI for freehold properties increased by 5.7% between December 2023 and December 2024. The index increased by 0.5% month-on-month in December 2024. Commenting on this data print, Dr Roelof Botha, an economist and economic advisor to the Optimum Investment Group, said the latest residential property price index for South Africa, published by Stats SA, is not aligned with two key indices generated by private sector property indices. He said both the BetterBond House Price Index and the FNB House Price Index were at levels below 5% for December 2024, reported by Stats SA.
Hi Dubai
20-02-2025
- Business
- Hi Dubai
Mastering the Art of Luxury Real Estate Investment: Key Strategies for UHNWIs Moving to Dubai
As global wealth migration continues to surge, Dubai has cemented its position as the premier destination for ultra-high-net-worth individuals (UHNWIs) seeking luxury real estate investments. With its unparalleled blend of strategic location, tax benefits, and world-class infrastructure, Dubai offers a wealth of opportunities for discerning investors. For those looking to capitalise on this dynamic market, mastering the art of luxury real estate investment requires a strategic approach. Here are the key strategies for UHNWIs moving to Dubai: Prime Locations: Focus on Exclusive Areas with High Value Dubai's luxury real estate market is defined by its iconic neighbourhoods, which consistently deliver high returns and prestige. Areas such as Palm Jumeirah, Emirates Hills, Downtown Dubai, and Dubai Marina remain the gold standard for luxury living. According to recent reports, Dubai's all-residential property price index (RPPI) rose strongly by 19.46% year-on-year in November 2024, continuing its double-digit growth trend since January 2023. This growth underscores the enduring appeal of these locations, particularly among international buyers in the city. Investors should prioritise properties in these areas, as they offer not only capital appreciation but also strong rental demand from affluent tenants, with prime rental yields averaging 6-7% annually. Tourism & Business Growth: Target Luxury Rental Opportunities in Popular Areas Dubai's thriving tourism and business sectors present lucrative opportunities for luxury rental investments. The city welcomed over 18.72 million international visitors in 2024, according to Dubai's Department of Economy and Tourism, with luxury travellers driving demand for high-end accommodations. Areas like Jumeirah Beach Residence (JBR), Bluewaters Island, and Business Bay are particularly popular among short-term renters, offering investors the potential for high rental yields. With Dubai's tourism sector projected to grow further, targeting properties in these areas can provide a steady income stream. Off-Plan Projects: Invest Early in Developments with Future Growth Potential Off-plan properties remain a cornerstone of Dubai's real estate market, offering investors the chance to secure premium units at competitive prices. Developments such as Dubai Creek Harbour, Emaar Beachfront, and The Palm Jebel Ali are poised for significant growth, with infrastructure projects like Expo City Dubai and Al Maktoum International Airport driving future demand. According to Dubai Land Department, off-plan transactions accounted for 66% of total sales volume and 64% of total sales value in 2024, highlighting the growing confidence investors place in these projects. Early investment in off-plan properties can yield substantial returns as these areas mature. Sustainable & Smart Buildings: Prioritise Eco-Friendly and Tech-Enabled Properties As sustainability becomes a global priority, Dubai is leading the way with eco-friendly and smart buildings. Developments like The Sustainable City and District 2020 are setting new standards for green living, while smart home technologies are becoming a must-have feature for luxury properties. Demand for sustainable buildings in Dubai is expected to grow, driven by both regulatory initiatives and consumer preferences. Investing in such properties not only aligns with global trends but also enhances long-term asset value. Tax Benefits: Leverage Dubai's Tax Advantages for Greater Returns Dubai's tax-friendly environment remains a major draw for UHNWIs. With no income tax, capital gains tax, or inheritance tax, investors can maximise their returns. Additionally, initiatives like the Golden Visa programme, which grants long-term residency to property investors, further enhance Dubai's appeal. According to Henley & Partners, the UAE has solidified its position as the premier destination for high-net-worth individuals globally, with a projected net inflow of over 6,700 millionaires in 2024, more than any other country in the world, many of whom are attracted by these financial incentives. Mixed-Use Developments: Diversify with Properties Offering Multiple Income Streams Mixed-use developments are redefining Dubai's real estate landscape, offering a blend of residential, commercial, and retail spaces. Projects like Dubai Harbour, Meydan One, and Dubai South provide investors with diversified income streams, from rental income to capital appreciation. These developments also cater to the growing demand for integrated lifestyles, making them highly attractive to tenants and buyers alike. Networking: Build Relationships with Local Experts Navigating Dubai's luxury real estate market requires in-depth knowledge and expertise. Partnering with local real estate specialists like Unique Properties ensures access to exclusive opportunities and tailored advice. With a proven track record of serving UHNWIs, Unique Properties offers end-to-end services, from property selection to visa assistance, ensuring a seamless investment experience. Conclusion Dubai's luxury real estate market offers unparalleled opportunities for UHNWIs, combining high returns with an exceptional quality of life. By focusing on prime locations, leveraging tourism growth, investing in off-plan projects, and prioritising sustainability, investors can unlock the full potential of this dynamic market. With the right strategies and expert guidance, Dubai remains the ultimate destination for luxury real estate investment. For more information on how to navigate Dubai's luxury real estate market, contact Unique Properties today on UAE FREE PHONE: 800 18881, TEL: (+971) 44 55 8888 or at info@ News Source: All Details
