House price index (HPI) data for the fourth quarter of the financial year 2019-2020 is out. The index data released by Reserve Bank Of India (RBI) shows that there has been a 3.9 per cent rise during the fourth quarter of 2019-2020 as compared to a year ago. Mumbai recorded the highest sequential rise, as per the report.
The data also says that all-India HPI contracted by (-)0.2% on a sequential basis (QoQ), for which RBI said was mainly due to decline in the house prices in Delhi, Bengaluru, Ahmedabad and Jaipur.
The HPI varied widely across cities and ranged from 22.6 percent (in Jaipur) to (-) 13.8 percent (in Kochi). The HPI is calculated on base year 2010-11 and is based on transaction level data received from housing registration authorities in ten major cities (viz., Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow and Mumbai).
Here is RBI’s HPI.
A property price depends on various factors such as location (proximity to facilities like schools, hospitals and markets, distance from public transport, quality of roads and so on), neighbourhood, quality of construction, amenities and age of building, among others. RBI’s HPI findings show that prices in Q4 were higher than last year at the same time.
However, COVID-19 outbreak has disrupted the market majorly. Uncertainty in the market and dwindling job security due to COVID-19 induced crisis have impacted the financial position of the buyers and may play its role on the demand side in the coming months. According to a survey by a real estate portal, the majority of the prospective buyers who were looking to buy a house before the pandemic have not dropped their plans to buy within a year. The rest have postponed their buying plans as of now owing to the financial constraints and uncertainty brought by COVID-19.