Residex was done in 5 cities of Bangalore, Bhopal, Delhi, Kolkata and Mumbai. The price movements were captured from year 2001 through to 2002, 2003, 2004 and 2005. Bangalore was 100 in 2001 and 275 in 2005 while Delhi moved from 100 to 201 from 2001-2005, Bhopal- 100-179 and Mumbai 100-178.
Speaking at the Credai's NATCON conference, NHB' Kaul said that there was a need to do an index for residential property prices. "Increase in housing finance has been 25 per cent each year. In other sectors of economy we have sophisticated systems of tracking markets whether it is stock markets, consumer goods. But real estate has not been formally tracked and price movements have not been captured. There was a need to develop a system by which real estate markets could be tracked."
The need for Housing Property Index (HPI) was due to urbanization, high economic growth, real estate assets that are a significant component of wealth, increase in bank lending to real estate sector, need for transparency in the market, overall development of the real estate market and policy inputs to government for real estate sector.
Residex will be an authentic indicator of price movements and it also points out areas which have a high growth potential. The project was initiated at the behest of GoI to measure residential property market and gathers information about price movements in residential properties and track reasons behind it- it's the official property index in the country.
Methodology used was the Price Relative Method. The technical advisory group consisted of CSO, NSO, RBI etc- after discussion all methods and practices, price relatives were calculated.
Australia, Canada, US bring out their own indices. Each Indian city was divided into three categories - less than 45 sq m, 45-90 sq m and more than 90 sq m. Sources of information were real estate agents, developers and Resident Welfare Associations. Issues were data collection, authenticity of data, need for cross verification, cost and methodological aspects. The transacted prices were taken and not the registered value of houses to get the realistic picture.
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