The Reserve Bank of India (RBI) has unveiled its latest data, revealing a significant upswing in the All-India House Price Index (HPI). In the April-June quarter of the fiscal year 2023-24, the HPI recorded a robust growth rate of 5.1%.
This substantial increase marks a noteworthy shift in the dynamics of the Indian real estate market, underlining the resilient nature of the housing sector.
As housing prices continue to surge, this development reinforces the ongoing demand for residential properties and offers valuable insights into the evolving trends in the sector.
The HPI data, based on transaction-level information received from registration authorities in ten major cities, provides a comprehensive overview of the housing market, impacting a wide range of stakeholders, from policymakers to investors and prospective homeowners.
This article delves into the recent trends in the Housing Price Index, offering a detailed analysis of the state of the real estate market in India, and the significance of the National Housing Bank’s (NHB) Residex in tracking these trends.
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Housing Price Trends Across Cities
During the first quarter of 2022-23, housing prices exhibited varying trends across cities in India, providing an interesting insight into the state of the housing market.
Notably, 42 cities experienced an increase in residential property prices, reflecting a year-on-year growth of 3.5 percent.
In contrast, five cities witnessed a decline in the rates of residential units, while prices remained stable in three cities. These findings are based on the Residex, a housing price index developed by the National Housing Bank (NHB), which offers comprehensive insights into the ever-changing real estate landscape.
City-Specific Insights
The Reserve Bank of India’s (RBI) quarterly House Price Index (HPI) report provides a deep dive into the dynamics of residential property prices across the nation.
The data used for this comprehensive report is sourced from registration authorities in ten major Indian cities.
These cities are Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow, and Mumbai. The report reveals diverse trends in housing price growth within these urban centers, shedding light on the unique characteristics of each city’s real estate market.
While the housing market saw growth in most cities, certain key urban centers experienced a sequential contraction in their housing price indices during the first quarter of 2022-23. Delhi, Kolkata, and Jaipur were among these cities that witnessed a decline in the housing market.
Delhi Leads with 14.9% Growth
Among the cities included in the HPI report, Delhi stands out with an impressive annual HPI growth rate of 14.9%. This significant increase highlights the robust nature of Delhi’s real estate market, which continues to attract investors and homebuyers alike.
The double-digit growth rate is a testament to the city’s resilience and the increasing demand for residential properties in the national capital.
Kolkata Witnesses a Contraction
In contrast to Delhi’s remarkable growth, Kolkata witnessed a decline in house prices during the period covered by the report. The housing market in Kolkata experienced a contraction of 6.6%, reflecting a decrease in property prices.
This variation underscores the disparities in housing market performance across different regions in India. While some cities experience substantial growth, others face challenges, and these city-specific insights provide valuable information for both potential investors and policymakers to make informed decisions in the real estate sector.
However, the majority of urban areas observed an expansion in their housing price indices, signifying the overall resilience of the real estate sector in India.
Continued Growth in HPI
In the latest update, the Reserve Bank of India (RBI) has released data for the April-June quarter of 2023-24, which reveals that the all-India House Price Index (HPI) rose by 5.1 percent.
This significant increase is compared to the 3.4 percent growth observed in the same period a year ago. The RBI continues to provide quarterly HPI reports, relying on transaction-level data received from the registration authorities in the ten major cities mentioned earlier.
Understanding the Housing Price Index
The Housing Price Index (HPI) provides valuable insights into the trends of residential property prices across the nation. This quarterly release by the Reserve Bank of India, with the base year being 2010-11, is founded on transaction-level data obtained from the housing registration authorities in ten major Indian cities.
These cities include Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow, and Mumbai.
NHB Residex
The National Housing Bank (NHB) plays a crucial role in providing an in-depth perspective on housing prices in India through its NHB Residex. Established under the National Housing Bank Act of 1987 by the Government of India, NHB was previously a functional unit of the RBI.
The NHB Residex is formulated with guidance from a Technical Advisory Committee (TAC) comprising stakeholders from the housing market.
The NHB Residex underwent a significant overhaul, making a comeback in 2018. This revamped version boasts enhanced city coverage, encompassing 50 cities with eventual plans to expand to 100.
The base year was also updated to 2012-13, and new data sources were introduced, including data from banks, home finance companies, and market surveys.
The NHB Residex now provides two quarterly Housing Price Indices:
- Market HPI: This index captures list prices of under-construction properties, collected through surveys of developers. It offers a valuable glimpse into the pricing trends for new properties in the market.
- Assessment HPI: Data reported by banks and finance companies that extend home loans are collated into this index. It reflects the trends in property prices from the perspective of those providing housing finance.
In conclusion, the surge in the Housing Price Index in the April-June quarter of 2023-24 reinforces the resilience of the Indian housing market. It reflects the ongoing demand for residential properties and hints at the evolving dynamics in the sector.
The NHB Residex, with its comprehensive data sources and benchmarks, continues to be an essential tool for policymakers, investors, and anyone interested in the state of the Indian housing market.
The real estate sector in India plays a vital role in the overall economic landscape, and understanding these trends is paramount for making informed decisions in the housing market.
This information is critical for policymakers, investors, and anyone interested in the state of the Indian housing market. The real estate sector in India, as evidenced by the HPI, plays a vital role in the overall economic landscape, and understanding these trends is paramount for making informed decisions in the housing market.
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