How many years of income would it take for you to be able to afford a house in India today?
The Price to Income Ratio is an accepted measure of the average price of a house compared to the average income of a resident...
Ideally, as per rules of Personal Finance, I would recommend that you not get a house that’s more than 6 times your annual income...
but real estate is becoming so unaffordable for the masses that I’ll just leave you with some data, and you can take your pick...
The average for India at the moment comes to 11 years of annual income to afford a 3BHK
Mumbai - 33
Kochi - 21
Thane - 17
Bhopal - 15
Chandigarh - 14
Nagpur - 13
Delhi - 11
Coimbatore - 10.5
Dehradun - 10.5
Goa - 10
Chennai - 9
Mohali - 9
Indore - 8.5
Kolkata - 8.5
Surat - 8.5
Bhubaneswar - 8
Ahmedabad - 8
Noida - 8
Gurgaon - 7.6
Jaipur - 6.5
Bangalore - 6.5
Pune - 6
Hyderabad - 5
Now rather than asking you to pick cities where the Price to Income Ratio is 8 or below... I’d say if you’re at an age below 35... try and upskill so hard that your income increases faster than the rise in prices.
And in the same breath, while it may be counter-intuitive, but if it’s not a house to live in, but as an investment, it makes sense to invest it just in the NIFTY 50 Index or ETF to give you much better returns with lower risk over the next 10-15 years.
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.
@vishnumohannair8506
1 month ago
He proved himself to be an arm chair expert. I moved from Kochi to Hyderabad recently and prices here are eye opening. Also he is not giving context, A 3 bedroom apartment right next door to Infopark will cost you 1 crore in kochi, For the same price you can buy an apartment 20 km from hitech city
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