The Housing Price Index (HPI) in India shows how home prices are changing. Released every three months by the Reserve Bank of India, it highlights trends in the housing market across ten major cities. It is useful for home buyers, real estate investors, and policymakers.
The Housing Price Index (HPI) is a major statistic for measuring real estate price changes in India. This quarterly index published by the Reserve Bank of India (RBI) analyses changes in 10 major cities, including Mumbai, Delhi, and Bengaluru. Using 2010-2011 as its base year, the HPI facilitates pricing comparisons throughout time. As the data is obtained directly from official property transaction records, it is dependable and trustworthy.
The housing price index is useful information for potential homebuyers, investors, and policymakers so that they can understand the variations in property prices geographically and across time periods. Since consumer expenditures and lending activity are influenced by housing costs, the HPI is an important measure of the country’s economic health.
What is Housing Price Index
The House Price Index (HPI) tracks how home prices change over time, showing how much it costs to buy a house. But homes are more than just investments; they’re where we live and feel safe. So, when house prices go up or down, it can really affect how much money people feel they have, which then affects how much they spend and how much they borrow.
The Reserve Bank of India’s HPI looks at house prices in ten big cities: Mumbai, Delhi, Chennai, Kolkata, Bengaluru, Lucknow, Ahmedabad, Jaipur, Kanpur, and Kochi.
They use the year 2010-2011 as a starting point to make it easier to compare prices over the years. The numbers in the index come directly from official records of house sales, which the state registration offices keep. This makes sure the information is real and trustworthy.
RBI Housing Price Index vs NHB Residex
The Reserve Bank of India’s (RBI) HPI is different from the National Housing Bank’s (NHB) Residex. NHB Residex came first, back in 2007, as India’s first official house price index. It was put together with help from a Technical Advisory Committee, which included people from the government and various industries. Both the RBI’s HPI and NHB Residex try to show how house prices are changing, but they use different methods and look at different areas.
Housing Price Index Calculation
Calculating the HPI is a careful process to ensure accuracy and a true market representation. This method shows changes in housing prices, accounting regional differences and various property types.
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Data Gathering: They collect information on individual property sales from the registration offices in ten big cities. This information covers property prices and their features.
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Sorting Properties: The properties are sorted by size (floor space area—FSA) into three groups: small, medium, and large.
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Figuring Out Average Prices: Every three months, they calculate the average price per square meter for each of these size groups in each city’s area or ward.
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Setting Weights: They give each size group a weight based on the number of properties of that size sold in each ward from April 2010 to March 2011.
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Calculating Price Changes: For each size group and ward, they figure out how much the price has changed by comparing the current price to the price during the base year (these are called “price relatives”).
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Overall Price Change: Finally, they combine these price changes, giving the wards more importance and sales during the base year. This helps them find the overall price change for the whole city.
- All-India Index Formation: To create the All-India House Price Index (HPI), the individual city indices are combined. The weight of each city is determined based on its population according to the 2011 census.
Trends In The Housing Price Index 2025
Recent data indicates a consistent upward trajectory in housing prices across India, albeit with regional disparities:
Looking at the numbers for Q2 in FY 2024-25, the overall Housing Price Index across India ticked up by 4.3% compared to last year. That is a bit higher than the 3.3% jump seen in the quarter before. Bengaluru is leading the pack with an 8.8% yearly increase, while Kanpur saw prices dip by 2.0%. It shows how different things are across the country.
If we rewind to Q1 of FY 2024-25, the HPI was up 3.3% year-over-year. This was a slowdown from the 4.1% growth in the quarter prior and even further off the 5.1% we saw in the same quarter a year ago.
These numbers show how lively and ever-changing India’s real estate market is. City development, the economy, and the balance of supply and demand in different areas all play a big role.
Benefits of the Housing Price Index (HPI):
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Consistent Quality Measurement: By consistently tracking the same attributes over time, the HPI makes sure that changes in housing values are caused by real market swings rather than changes in the calibre of the homes.
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Nationwide Coverage: With data collected from two nationwide housing agencies supported by the government, the HPI supplies a thorough understanding of the country’s housing market.
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Timely Updates: Updated every quarter when new mortgage information is released, the index provides the latest perspectives on changes in home prices.
Conclusion to Housing Price Index
Knowing the changes in the housing price index helps you figure out how the building industry and the whole economy are doing. If home prices go higher than what it costs to build them, then building new places becomes profitable, which could boost the economy. These changes also affect how much banks charge for loans and the overall health of the financial system. Hence it is crucial to figure out the Housing Price Index carefully and remember the things it can’t tell us.
Disclaimer:
Magicbricks aims to provide accurate and updated information to its readers. However, the information provided is a mix of industry reports, online articles, and in-house Magicbricks data. Since information may change with time, we are striving to keep our data updated. In the meantime, we suggest not to depend on this data solely and verify any critical details independently. Under no circumstances will Magicbricks Realty Services be held liable and responsible towards any party incurring damage or loss of any kind incurred as a result of the use of information.
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