Housing affordability has worsened over the past four years as the house price to income (HPTI) ratio increased from 56.1 in March 2015 to 61.5 in March 2019, according to the Reserve Bank of India’s quarterly residential asset price monitoring survey (RAPMS) on housing loans disbursed by select banks/housing finance companies (HFCs) across 13 cities.

Mumbai (with a HPTI of 74.4) remains the least affordable city in India, while Bhubaneswar (54.3) remains the most affordable city, the RBI said. The HPTI ratio reflects affordability.

The movement of 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 LTI ratio in the case of Mumbai in March 2019 was the highest among 13 cities at 4 (3.4 in March 2015) and the lowest in the case of Lucknow at 2.7 (2.5).

The median LTV (loan to value) ratio moved from 67.7 per cent to 69.6 per cent between March 2015 and March 2019, showing that banks have become increasingly risk-tolerant. LTV is the amount of loan a lender is willing to give and is calculated in terms of the percentage of the property value.

The median EMI-to-Income (ETI) ratio has remained relatively steady during the past two years (38.2 in March 2019 against 38.4 in March 2018); however, Mumbai (43.3), Pune (40.7) and Ahmedabad (43.5) recorded higher median ETI compared to other cities.