Calcutta is the third most affordable residential property market among the top eight cities in India in the first half of 2022, a study by international property consultancy Knight Frank has concluded.

The study said Ahmedabad is the most affordable city to buy an apartment, followed by Pune and Chennai, which ranked joint second. Calcutta comes third in the list even as, like all seven others, it has experienced a 200 basis point (2 per cent) fall in affordability over 2021 due to two benchmark rate hikes by the RBI.

The repo rate — the rate at which the central bank lends to the commercial banks — was hiked by 90 basis points (0.9 per cent) in the last quarter, spiking home loan rates from a record low.

The home loan interest rate is now hovering around 7.5 per cent. The Knight Frank affordability index indicates the proportion of income that a household requires to fund EMI of a housing unit in a particular city.

For Calcutta, EMI to income ratio stands at 27 per cent while Pune and Chennai are at 26 per cent. Mumbai continues to be the least affordable city with the ratio at 56 per cent while Ahmedabad stood at 22 per cent. Looking at a decade long horizon, all the cities have become more affordable.

Real estate observers attribute it to deceleration in house price increase coupled with rise in income level. “Apartment prices moved only nominally in the last 7-8 years. It inched up earlier this year due to a raw material cost-push,” said a Calcutta-based builder. For Calcutta, affordability has increased from 45 per cent in 2010 to 30 per cent in 2020 and then fallen to 25 per cent in 2021 due to the pandemic.