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HindustanTimes Fri,19 Sep 2014

Not-so-real? Property indices are of little help to buyers

Devesh Chandra Srivastava, Hindustan Times   October 08, 2011
First Published: 00:19 IST(8/10/2011) | Last Updated: 02:06 IST(8/10/2011)

Thriving real estate markets across Indian cities offer enormous potential in terms of market research and data collection. And yet there is no real data that homebuyers can fall back on in order to compare prices. With the real estate market primarily in the hands of large as well as small brokers, even data provided by the three property indices in India are only indicative and don't really give the real picture.

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"Property indices are a way to present the trend in respective markets," said Vineet Singh, business head, 99acres.com, a real estate portal.

But, no easy reckoner

What they showcase?

Residex: NHB's Residex tracks rates of residential properties across 15 cities, including Delhi, Faridabad, Mumbai, Kolkata, Bangalore and Chennai. For each city, there are details of individual municipal areas or zones.

Makaan.com Property Index: This provides information on price movements of residential properties across Delhi-NCR, Mumbai, Bangalore, Pune, Hyderabad, Chennai, Kolkata, Ahmedabad and Chandigarh. "The property index that comes every month is based on listings on our website," said Aditya Verma, senior vice-president and chief operating officer, Makaan.com. "The same listing when used for the research is cross-checked with our sales team for its reliability and authenticity."

PropIndex: Being in the apartment space, PropIndex focuses on apartment trends and covers the most active top 11 cities of the country. "In each city report, to ensure a holistic perspective of the performance of real estate markets, four different key metrics are covered - PropIndex (which is a composite index of capital appreciation, supply and apartment rates), price monitor (which shows capital appreciation or depreciation), rent monitor (which shows rental appreciation or depreciation) and yield monitor (which shows the rental yields within each city)," said Sudhir Pai, business head, Magicbricks.com.

Where they lack

Limited cities and areas covered: The data from these indices will not be of any use for you if you live in a city other than the ones that these indices track. Moreover, not all areas are covered even in the cities that are part of the indices.

While Residex covers 15 cities, PropIndex is limited to 11. Apart from being limited to cities, these indices do not cover emerging residential destinations.

Data only indicative: The data in these indices cannot be fully relied upon since they are only indicative. Usually, the actual market prices are based on transactions and in some cases depend on local brokers, but the indices follow a different method to arrive at prices.

No uniformity in findings: There is no similarity in the market values reflected by each of the indices.

Delayed data: Delay in collecting and presenting data is also a problem. For instance, if you want to buy a house now, data is available only for the last quarter.


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