Residex snippets

The NHB Residex set out to gauge house price movements over a six-year period both by locality and house size in five cities—Mumbai, Delhi and NCR, Bangalore, Kolkata and Bhopal. It shows that realty prices have been showing an upward trend in all five cities with Bangalore (313) at the top, with a three-time increase, followed by Delhi (298) and Mumbai (268). The National Housing Bank’s real estate price index, Residex, which has shown that realty prices in the suburbs have risen sharply, takes into account both what is shown in registration records and what is actually paid in transactions so as to ensure that market trends are reflected. Launched in July 2007, it tracked property prices in Delhi, Mumbai, Kolkata, Bangalore and Bhopal by collecting data from the field as well as housing finance companies. Experts say the rise of the suburbs could be a reflection of the already high property prices in localities such as South Ext, Safdarjung Enclave and Vasant Vihar in Delhi and Malabar Hill and Bandra West in Mumbai at the time the price movements were tracked—in short, what economists call the ‘base effect’. Many attribute this phenomenon also to the development of new growth centres in the suburbs or outskirts and the affordability of these areas. The old posh localities in most cities are already saturated, both in terms of availability of new houses and commercial establishments like offices and shops, causing buyers to move further afield. For Residex, 2001 was taken as the base year for the study to correspond with the Wholesale Price Index and and the Consumer Price Index. The National Housing Bank plans to extend the index to ten more cities—Ahmedabad, Chandigarh, Chennai, Kochi, Jaipur, Patna, Lucknow, Pune, Surat and Hyderabad—by March this year which will have updated property prices until December 2008. It will later cover all 63 cities under JNNURM.