Keeping in view the prominence of housing and real estate as a major area for creation of both physical and financial assets and its contribution in overall National wealth, a need was felt for setting up of a mechanism, which could track the movement of prices in the residential housing segment. Regular monitoring of the house prices can be useful inputs for the different interest groups. Accordingly, National Housing Bank, at the behest of the Ministry of Finance, undertook a pilot study to examine the feasibility of preparing such an index at the National level. The pilot study covered 5 cities viz. Bangalore, Bhopal, Delhi, Kolkata and Mumbai. Besides, a Technical Advisory Group (TAG), with Adviser, Ministry of Finance, as its Chairman and comprising of experts members form RBI, NSSO, CSO, Labour Bureau, NHB and other market players, was constituted to deal with all the issues relating to methodology, collection of data and also to guide the process of construction of an appropriate index . Based on the results of the study and recommendations of the TAG, NHB launched RESIDEX for tracking prices of residential properties in India, in July 2007 by Shri P. Chidambram (then Hon’ble Finance Minister). Till now it has been updated up to quarter ended Mar, 2015.
|Launching of NHB RESIDEX on 10th July, 2007||Shri P. Chidambaram (Hon’ble Finance Minister) and Kumari Shailja ( Hon’ble Minister, Urban Employment & Poverty Alleviation)|
|In order to guide and oversee the construction of NHB RESIDEX and extension of its coverage, a Standing Committee of technical experts has been constituted under the Chairmanship of CMD, NHB with representations from the Government of India, (Ministry of Finance, NSSO, CSO, Labour Bureau), RBI, and other prominent market players.
At present, index is being developed only for residential housing sector. However, at a later stage, based on experience of constructing this index for a wider geographical spread, the scope of the index could be expanded to develop separate indices for commercial property and land, which could be combined to arrive at the real estate price index.
NHB RESIDEX: Salient Features
It is envisaged to develop a residential property price index for select cities and subsequently an all India composite index by suitably combining these city level indices to capture the relative temporal change in the prices of houses at different levels.