Affordable Housing Defined

The Government of India defines affordability as follows:

For lower income group, apartment should not exceed four times the household gross annual income. For the middle-income group, the prices should not exceed five times the gross annual income.

Similarly, the rent should not exceed 30 per cent of the monthly salary for the lower income group. For the middle income, it should not exceed 40 per cent.

In other words, for a middle-income family, which earns Rs. 30,000 a month, any apartment costing more than Rs.18 lakh is unaffordable.For the poor  who earn about Rs.10, 000 a month, apartments priced more than Rs. 5 lakh is unaffordable.

This is something to think about when investing in real-estate.