India is among the top 10 countries in the world where buyers find it easier to purchase their first home and get on the property ladder, an analysis by Investing Reviews has said.
Countries were ranked according to their overall Property Affordability Score, with 1 being the most affordable and 50 being the least.
The study conducted by Investing Reviews analysed several different factors, including average wages, average property prices, and the cost of utilities to reveal the most and least affordable countries for first-time buyers.
India has the most affordable housing of all the G20, OECD and European Union countries, with a score of 9.33. Relatively low average salaries are offset by equally low property costs per square metre, with very affordable utility costs increasing affordability, it said.
In India, the average cost of for a 915 sq ft apartment was around Rs 3000; the average internet costs (60 mbs minimum) was around Rs 800; the average price for a 495 sq ft apartment was around Rs 31 lakh; the average annual net salary (after tax) was around Rs 3.7 lakh and the house price as a percentage of salary was 825%.
In second place, with a property affordability score of 9.29, is Turkey. A relatively low house price to salary ratio helped to keep homeownership a realistic prospect for first-time buyers in the country, the analysis said.
Bulgaria took third place with a property affordability score of 8.88, making it a great place for prospective buyers who will be able to take advantage of reasonable property prices and affordable bills, despite the country having a low average salary.
The study noted that as a general rule of thumb, property in countries with lower salaries tends to be much more affordable for locals than property in nations with higher wages. This indicates that while property values have risen dramatically over the past few decades in the most developed countries, wages have not been able to keep up, leading to a crisis of affordability for many young people and first-time buyers.
On the other hand, those who do own property in those countries have experienced a huge boost to their personal finances that they would have missed out on in many other parts of the world, it said
There are also countries where first time buyers will have the most trouble affording to buy their own homes. High property prices, low salaries and expensive bills all play a part in determining which countries are the most unaffordable.
The least affordable country for first-time buyers is Luxembourg, which received a Property Affordability Score of just 2.84. There’s not a lot of space in this tiny European nation, which might go some way to explaining the very expensive cost of apartments, which on average cost as much as £751.16 per square foot.
Switzerland has the second most unaffordable property market, receiving a Property Affordability Score of 3.11. This wealthy country, nestled in the beautiful Alps, benefits from a pristine environment and is a highly desirable location for its Alpine scenery and high standard of living, which also helps to drive property prices up.
South Korea came third from the bottom, with a Property Affordability Score of 3.94. With relatively low salaries and high apartment costs, South Koreans might find it difficult to get their first step onto the property ladder. However, once they do manage to acquire their home, they will benefit from much more reasonable utility and internet costs.