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    Default Homes become more affordable in last 10 years

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    Real estate prices in metros such as Mumbai may be at a record high. But, on an average, homes across the country are more affordable than they were five or even ten years ago.

    According to an analysis of HDFC data, the average cost of a house purchased by its borrowers was Rs 12 lakh in the year 2002. Over the years, the average amount paid for a house (by HDFC borrowers) rose to Rs 40 lakh in 2011. But salaries have risen faster. The same period saw the average borrower's salary rise from Rs 2.45 lakh to Rs 8.3 lakh. As a result, affordability - measured by the home price as a multiple of annual salary - has improved. The borrower, who on an average needed 5.1 times his annual salary to buy a house in 2002, needed only 4.8 times his annual salary in 2011.

    The affordability figure is a national average and over the years HDFC's borrower profile has also changed with more ***** being disbursed in smaller cities. However, the long-term trend in affordability holds true for most cities because of high levels of income growth in the first decade of the 21st century. The country's per capita income has tripled from Rs 19,040 in 2002-03 to Rs 53,331 in 2010-11.
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