Union Housing & Urban Affairs Secretary, Durga Shanker Mishra launches Housing.com-ISB’s Housing Pricing Index (HPI)
New Delhi: Leading online real estate portal Housing.com along with the global business school, Indian School of Business (ISB), on Monday announced the launch of its Housing Pricing Index (HPI), an indicator of economic activity in real-estate, the second-largest employment generating sector in India after agriculture. Launched during a virtual meet attended by Union Housing & Urban Affairs Secretary, Durga Shanker Mishra and several industry bigwigs and academicians, the HPI will provide monthly reports on price and quantity movement in various property markets across the country.
According to the Gurugram-based digital real estate company, the HPI, created in association with the Indian School of Business’ (ISB) Srini Raju Centre for IT and the Networked Economy (SRITNE), aims to serve 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.
Shri. Durga Shanker Mishra, Secretary, Ministry of Housing and Urban Affairs, Govt. of India, said: “The Housing Price Index jointly developed by the Indian School of Business and Housing.com has the potential to emerge as a good indicator of the country’s real-estate market health. The real-estate sector has been impacted due to the COVID-led slowdown and overall uncertainty. At this time, it is essential to track the growth via credible sources that will help authorities make quicker and informed decisions during such exogenous shocks. We have observed that the demand has already picked up in Q1 2021 and the sector has started to show signs of recovery. I commend and encourage the two institutions for collaborating towards this initiative to monitor the movement of housing prices and quantities in a fast-growing economy like ours.”
“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. For real estate builders, having access to information such as this has become more crucial than ever now, with the demand landscape rapidly evolving due to the emergence of the “work-from-home” concept in the wake of the COVID-19 pandemic,” said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com.
Indian School of Business (ISB) through its Srini Raju Centre for IT and the Networked Economy (SRITNE) is delighted to partner with Housing.com in launching the robust and comprehensive Housing Pricing Index. This indeed is a step in the right direction, and we are sure HPI will go a long way in equipping various stakeholders take informed choices and, in the process, add more value and worth to their assets, said Rajendra Srivastava, Dean ISB.
“We look forward to launching many such programmes which will facilitate socio-economic development of the country, he added.”
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. I wish the HPI team all the best and truly value their commitment to launching the index and white paper on this subject. I hope it will drive further research in one of the most significant sectors of the economy.,” added Mr. Srivastava.
Dr. Niranjan Hiranandani, National President – NAREDCO; Founder & MD – Hiranandani Group, said – “It has been a long hauling grind for the Indian Real Estate sector to undergo a system reboot on the back of various structural policies introduced recently. In the current pandemic, the sector witnessed an increased use of and reliance on technology. The transition in the Digital Era has been quite phenomenal. The need was to revolutionize the sector with a financially disciplined, accountable and compliance-friendly system. People interested in real estate – buyers and sellers – have also been going through a tough time tracking the sector and gauging the right time to take an informed decision.
Introducing the data index for Real Estate, one of the vital economic growth anchors, is a leap forward. The prime objective to launch the ‘Housing Price Index’ in association with Housing.com and ISB is to bring transparency and narrow down the trust deficit between all the concerned industry stakeholders. It 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. This new-age methodology will promote Indian Real Estate at par with global best practices”, Dr. Hiranandani added.
Prof. Deepa Mani, ISB, said “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.”
Following the launch of the index, representatives from the government and industry stalwarts also shared their opinions and points of view about the ongoing pandemic situation and its impact on the industry during an interactive session.
Mr. Sharad Mittal, Executive Director | CEO-Real Estate Funds, Motilal Oswal Real Estate Investment Advisors II Pvt Ltd.), said “In 2020, the COVID-19 pandemic disrupted industries worldwide. India went into a countrywide lockdown, and the real estate sector, like other industries, took an initial hit. However, after July last year, the housing sector saw a resurgence in demand on the back of bottomed-out prices, low mortgage rates, peak affordability, Govt. incentives and an increasing emotional value of home-ownership due to the pandemic. Several developers clocked record sales in the last 2 quarters of the previous financial year. We believe that this recovery witnessed by the sector over the last 9 months was more long-term and a factor of strong growth-led fundamentals in the sector. While there is a hiatus right now on account of the second COVID wave, we believe that activity will boomerang quickly and demand will remain strong over the next 24-36 months”