Launched during a virtual meet attended by Union Housing & Urban Affairs Secretary, Durga Shanker Mishra and several industry leaders and academicians, the HPI will provide monthly reports on price and quantity movement in various property markets across the country.
The HPI in association with the industry body NAREDCO, will enable homebuyers, investors, real estate developers and policymakers to track high-frequency price movement in India's key residential markets.
According to the Gurugram-based digital real estate company, the HPI, created in association with the Indian School of Business' (ISB) Srini Raju Centre for IT and the Networked Economy (SRITNE), aims to serve as a tool that tracks changes in residential home prices across India's eight major markets.
The index could help a potential homebuyer assess the appropriate time to buy a property and at the same time assist sellers in knowing the most opportune moment to sell their assets. Policymakers and financial analysts can also use it as a reliable estimate to keep track of the trends in the sector.
Based on a survey of cities such as Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune from 2017 to the present, conducted every quarter, the HPI uses granular prices from localities and their corresponding weights based on transaction value share of that locality in India.
Data collected for this purpose include information on price per square foot, quantity, and the total value of transactions in the previous three months for various sub-localities within each city. It also includes other details such as the number of bedrooms, construction status, and the number of inventory units.
Durga Shanker Mishra, Secretary, Ministry of Housing and Urban Affairs, said: "The real-estate sector has been impacted due to the COVID-led slowdown and overall uncertainty. At this time, it is essential to track the growth via credible sources that will help authorities make quicker and informed decisions during such exogenous shocks."
Niranajan Hiranandani, National President of NAREDCO noted that introducing the data index for real estate, one of the vital economic growth anchors, is a leap forward.
"The prime objective to launch the 'Housing Price Index' in association with Housing.com and ISB is to bring transparency and narrow down the trust deficit between all the concerned industry stakeholders," he said.
Hiranandani, it will address the challenge of the paucity of well-defined data and foster companies with the right business intelligence, market insights, trends, and sentiments to sign off well-informed decisions.
"Buyers, as well as policymakers, are mostly forced to rely on market anecdotes and guesswork about property price movements in Indian cities in the absence of quality high-frequency data, especially locality specific data. The entire idea behind the launch of the Housing HPI is to address this issue," said Dhruv Agarwala, Group CEO, Housing.com.
Besides benefitting buyers, investors and policymakers, data from our HPI will also be immensely valuable for real estate developers who are considering a new locality to launch new developments, Agarwala said.