Affordability has improved across India’s key markets from 2014 to 2018 led by favourable home loan rates, as per a recently launched Home Purchase Affordability Index (HPAI) by JLL India. JLL HPAI has analysed affordability across India’s key seven cities, namely Mumbai, Delhi-NCR, Bengaluru, Chennai, Pune, Hyderabad and Kolkata, between 2011 and 2018 and factored in home loan interest rates, average household income and the price of a 1,000 sq ft apartment.Hyderabad had been the only affordable city in 2013, however the situation changed by 2018 with all cities except for Mumbai, becoming affordable. Although the financial capital remains unaffordable, Mumbai has witnessed a sharp improvement in affordability during the period. The same trend has been reportedly observed by other real estate consultancy firms. As per Knight Frank’s proprietary Affordability Index, Mumbai is India’s most expensive housing market but has seen the affordability of homes significantly increase in the last few years. It is now estimated that a house in Mumbai will cost approximately seven times the annual household income against 11 times in 2010. That said, except for Mumbai (seven), NCR (five) and Hyderabad (five), all other markets are below the 4.5 affordability benchmark as per Knight Frank’s report. Kolkata, Ahmedabad and Pune have shown improved markets in terms of affordability since 2010 and apartment prices in these regions are just three times their average household incomes. Mumbai, while still recording a high ratio of seven, has experienced the sharpest improvement since 2010.The main reason behind the increase in affordability is the higher growth in income as compared to property prices. Colliers International in its research report states that the average disposable income per annum for middle-income group has grown around 9 per cent across seven major cities in India over 2014-2018. However, the average growth in residential property prices was less than 2 per cent during the same period. This depicts the increasing affordability of residential spaces for the middle-income group of metro cities. Secondly, it is the reducing property size. There is a decline in the average size of residential units at launch during the period of study which has contributed to the growing affordability in the market. Markets of Mumbai (-25 per cent), Pune (-24 per cent) and Bengaluru (-18 per cent) have seen sharp reduction in the average size of homes since 2010, according to the Knight Frank report.Also, with the latest rate cut by the Reserve Bank of India, home loan rates are expected to come down further and eventually boost the affordability of buyers.