Housing Pricing Index launched to help homebuyers take informed purchase decisions

Asking Housing.com and ISB to make the index robust, Mishra said that the index will be useful for homebuyers as well as policymakers to decide the future course of action.

Mishra said that the National Housing Bank (NHB) also has its housing prices index.

The HPI has been created in association with the Indian School of Business’ (ISB) Srini Raju Centre for IT and the Networked Economy (SRITNE) and is aimed at serving as a tool that tracks changes in residential home prices across India's eight major markets.

By offering useful insights into price movement, 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 (Faridabad, Ghaziabad, Gurugram, Greater Noida and Noida), Hyderabad, Kolkata, Mumbai and Pune from 2017 to the present, conducted every quarter, the Elara Technologies-owned company's HPI uses granular prices from localities and their corresponding weights based on transaction value share of that locality in India, basing its findings on 1, 2, and 3-BHK apartments.

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.

“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. Aside from 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,” said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com

This index would help decision-makers in the industry and government by providing relevant information on the real estate market and design effective action and interventions, said said Rajendra Srivastava, Dean ISB.

Niranjan Hiranandani, national president, NAREDCO, founder and MD - Hiranandani Group, said that the Index 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.

“Policy makers and decision makers across the public and private sectors need accurate and timely information on economic activity for effective action and interventions. At present, such information is of low granularity and resolution and often fragmented and privately held, making coordination among economic actors difficult. Indices like the HPI would be especially relevant to industry and policy makers in the face of current systematic and pervasive disruptions in the economy, notably, the COVID-19 pandemic,” said Deepa Mani of ISB.