Housing prices increased in 42 cities in the first quarter of 2022-23, while five cities witnessed a decline in residential prices, according to the National Housing Bank’s (NHB) price index Residex released on August 20.
All of the eight major metros of the country viz., Ahmedabad (13.5 percent), Bengaluru (3.4 percent), Chennai (12.5 percent), Delhi (7.5 percent), Hyderabad (11.5 percent), Kolkata (6.1 percent), Mumbai (2.9 percent) and Pune (3.6 percent) recorded an increase in the index on an annual basis.
The Housing Price Index (HPI) tracks the movement in prices of residential properties in select 50 cities on a quarterly basis with FY 2017-18 as the base year.
The 50-city HPI based on valuation prices of properties collected from Primary Lending Institutions (HPI @ Assessment Prices) recorded an annual increase (Y-o-Y) of 7.0 percent in QE June 2022 as compared with 1.8 percent a year ago.
The annual change in HPI @ Assessment Price varied widely across the cities – ranging from an increase of 16.1 percent (Coimbatore) to a decline of 5.1 percent (Navi Mumbai).
On a sequential (Q-o-Q) basis, the 50-city index registered an expansion of 1.7 percent in April-June 2022 as against 2.6 percent in the previous quarter.
The index is showing an increasing trend on a Q-o-Q basis since June 2021.
While Kalyan Dombivali, Bidhan Nagar, Panvel and Thiruvananthapuram recorded a sequential decline in the HPI @ Assessment Price during the quarter (Kalyan Dombivali recording the maximum decline of 0.9 percent), the index recorded an increase in 37 cities with Chennai recording the highest sequential improvement of 4.5 percent.
The 50-city HPI at Market Price for under-construction properties computed using the quoted prices for under-construction and ready-to-move unsold properties, also recorded an annual increase (Y-o-Y) of 5.7 percent in QE June 2022 as against 1.9 percent a year ago, backed by the rising cost of building materials, the Index showed.
The annual variation in HPI at Market Price ranged from an increase of 28.6 percent (Bhubaneshwar) to a contraction of 13.2 percent (Indore), it said, adding, that the uptick in the asking prices for properties is indicative of continued demand and the rising cost of construction.
On a sequential (Q-o-Q) basis, the 50 city Index witnessed an increase of 1.8 percent during the quarter compared to 1.9 percent in the previous quarter.
The uptick in the asking prices for properties is indicative of continued demand and rising cost of construction. The overall increase in composite HPI at Assessment Price and HPI at Market Price is an indication of reviving housing finance sector.A stable to moderate increase in HPI also offers confidence to both homeowners as well as home loan financiers in terms of the retained value of the asset.