Mumbai, Mar 26 (IANS): Mumbai has recorded the third highest growth in annual household incomes among 32 major cities across the world during 2014-18, as per the inaugural issue of Knight Frank's global report Urban Futures.

The steep hike in incomes coupled with a modest rise in house prices in the five-year period made Mumbai a more affordable city amongst its global peers despite it being the most expensive real estate market in India, the report noted.

"The real house prices in comparison have grown at a much slower pace of 8 per cent, while the real disposable household income growth was over 20.4 per cent in the five-year period ending 2018," Knight Frank said in its report.

The survey evaluated 32 cities across the world to understand the difference between house prices and income. San Francisco saw the highest income rise at 25 per cent while Amsterdam at 63.6 per cent recorded the highest rise in house prices in 2014-18.

"The affordability in the city has improved on account of reduced size of units with largely stable prices. Consistent reduction in apartment sizes has also lowered the average ticket price for Mumbai," it said, adding new homes built during 2014-18 are smaller by 25 per cent.

Maximum launches, particularly in the last two years (2017 and 2018), are in the affordable and mid-ranged segment with ticket prices not exceeding Rs 75 lakh.

"This should be viewed positively, as it indicates a further possibility of growth of global and Indian organisations in the city (Mumbai), who are always looking at locations that are strategic and yet within the affordable range," Knight Frank India CMD Shishir Baijal said.

Mumbai has seen a steady increment in average incomes based on its economic growth, while the reduction in property prices has further enhanced affordability. The city has seen a drop of close to 7 per cent in ticket prices for new launches in 2018.

"With the recent announcement to reduce (Goods and Services Tax) GST on construction projects, the effective payout by the buyers is expected to come down further by 6-7 per cent," he said.

The report said government initiatives such as the Credit-Linked Subsidy Scheme (CLSS) and the Pradhan Mantri Awas Yojana (PMAY), a scheme that aims to ensure 2 crore affordable homes by 2022, have worked well.

Mumbai along with Moscow, Singapore and Paris saw their average real income grow faster than real house prices. It is now estimated that a house in Mumbai will cost about seven times the annual household income against 11 times in 2014.

Across the 32 cities, there was an average five-year real house price growth of 24 per cent, while average real income grew by only eight per cent over the same period.