COVID-19 and the urban housing affordability - evidence from select Indian cities

The COVID-19 crisis, globally, has significantly impacted the residential real estate market. Health concerns and lockdowns have contributed to the downturn of the sector. High unsold inventory, financial crunch, and lack of stakeholders' perspective fueled the decline in housing affordability. However, with the steady bouncing back of the economy and recovery in the market between the intermittent spikes in the pandemic, there has been a path to recovery. Housing sales, which is one of the significant yardsticks to ensure a robust economic recuperation, had an upswing of nearly 60% annually across major Indian cities during January-June 2022, as reported by Knight Frank's India Real Estate Report. Housing in India had been unaffordable even in the pre-pandemic period, but due to several government interventions during the pandemic, the housing sector was able to recover its lost ground.This paper aims at understanding the affordability of housing in seven major metropolitan cities across India. This is discerned through the analysis of the housing price data published by NHB-RESIDEX and the price-to-gross domestic product (GDP) ratios for the cities. It also examines the work from home (WFH) phenomenon and looks at the incentives and programmes from the government during the pandemic on housing in large cities in India.