There’s news for homebuyers. Like the Sensex, which tracks stocks, there is now a Residex that will track real estate prices.
Finance Minister P Chidambaram on Tuesday launched the NHB Residex, a housing index created by the National Housing Bank (NHB), the housing sector’s apex financial institution.
The housing index will incorporate, among other things, the location, quality of construction, amenities, and surrounding infrastructure of every house, and the demand profile of the neighbourhood.
The index, which has been launched in the five cities of Delhi, Mumbai, Bangalore, Kolkata and Bhopal, will cover 35 urban centres in the next phase. It will eventually be extended to 63 such centres.
The index assigns weights to 12 parameters to arrive at the average price of residential property in different areas in these cities. The index will be revised every six months, giving an idea of how prices have moved.
RV Verma, executive director, NHB, told HT that the sample data for houses will be based on transaction prices obtained from different sources such as banks, developers and government agencies. The index is likely to help municipalities, revenue departments and even banks, which will be able to track the overall trend of property loans and link them to price trends.
It can also be used while estimating an individual’s personal wealth, and by banks and housing finance companies while evaluating portfolios and sizing up collateral security before extending housing loans.