NHB RESIDEX: Housing Price Index up 7 per cent year-on-year in Q1

September 1, 2022

In an indication of a reviving housing finance sector, the National Housing Bank’s housing price index (HPI) recorded a 7 per cent year-on-year increase in the quarter ended June 30, 2022. This compared with a 1.8 per cent increase in the same quarter a year ago.

The HPI tracks the movement in prices of residential properties in 50 select cities. It is computed on a quarterly basis with FY 2017-18 as the base year.

The NHB RESIDEX currently offers two sets of quarterly Housing Price Indices (HPI) across the cities it tracks. List prices of under-construction property, collated through a survey of developers, is captured in the ‘Market HPI’. On the other hand, data reported by banks and finance companies that extend home loans, is collated in the ‘assessment HPI’.

Meanwhile, the annual change in  HPI@AssessmentPrice varied widely across cities, ranging from an increase of 16.1 per cent (Coimbatore) to a decline of 5.1 per cent (Navi Mumbai).

Of the 50 cities, 42 registered an increase in the index, whereas five registered a decline on an annual basis. The eight major metros viz., Ahmedabad (13.5 per cent), Bengaluru (3.4 per cent), Chennai (12.5 per cent), Delhi (7.5 per cent), Hyderabad (11.5 per cent), Kolkata (6.1 per cent), Mumbai (2.9 per cent) and Pune (3.6 per cent) recorded an increase in the index on an annual basis.

On a sequential (Q-o-Q) basis, the 50-city index registered an expansion of 1.7 per cent in April-June 2022 as against 2.6 per cent in the previous quarter. The index has shown 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@AssessmentPrice during the quarter (Kalyan Dombivali recording the maximum decline of 0.9 per cent), the index recorded an increase in 37 cities, with Chennai recording the highest sequential improvement of 4.5 per cent.

Under-construction properties

The 50-city HPI@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 per cent in QE June 2022 as against 1.9 per cent a year ago, backed by the rising cost of building materials, according to NHB.

The annual variation in HPI@MarketPrice ranged from an increase of 28.6 per cent (Bhubaneswar) to a contraction of 13.2 per cent (Indore).

On a sequential (Q-o-Q) basis, the 50-city index witnessed an increase of 1.8 per cent during the quarter, compared to 1.9 per cent in the previous quarter. The uptick in asking prices for properties is indicative of continued demand and the rising cost of construction, an NHB statement said.

The overall increase in composite HPI@AssessmentPrice and HPI@MarketPrice is an indication of a reviving housing finance sector. A stable-to-moderate increase in HPI also offers confidence to both the homeowner and the home loan financier in terms of the retained value of the asset, the statement added.

Published on

August 30, 2022

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