The Housing Price Index (HPI) provides an analytical tool for estimating changes in the rates of mortgage defaults, prepayments and housing affordability. The RBI releases the HPI based on transaction-level data from the registration authorities in 10 major cities each quarter. The cities are Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow and Mumbai. Do note that the movement of residential property prices varies widely from one city to another. Based on the Housing Price Index (HPI) data provided, with 2010-11 as the base year (100), we can observe several key trends and insights about the Indian real estate market from 2010 to 2023: Overall, there has been a significant increase in house prices across India over the past decade. The All India HPI has risen from around 94.24 in Q1 2010-11 to 316.33 in Q4 2023-24, representing a more than threefold increase in house prices nationwide.
However, the growth in house prices has not been uniform across all cities. Some metropolitan areas have experienced more rapid price appreciation than others. For instance, Lucknow has seen an almost 5 times increase in its HPI between Q1 2010-11 to Q4 2023-24, rising from 88.8 in Q1 2010-11 to 416.9 in Q4 2023-24. Delhi has seen one of the most dramatic increases, with its HPI rising from 100.72 in Q1 2010-11 to 351.15 in Q4 2023-24, more than tripling in value. Similarly, Kochi has shown substantial growth, starting at 89.61 and reaching 338.88 by the end of the period. Mumbai, often considered one of India’s most expensive real estate markets, has shown steady growth but not as explosive as some other cities. Its HPI increased from 90.63 to 294.18, which is significant but less dramatic than Delhi or Kochi. Interestingly, some cities have shown more moderate growth. Kanpur, for example, started at 95.31 and reached 170.57 by Q4 2023-24, indicating a slower rate of price appreciation than other major cities. Moreover, a similar pattern has been observed for Jaipur as well.
The impact of the COVID-19 pandemic is also noticeable in the chart. While there wasn’t a dramatic drop in HPI values across most of the cities during 2020-21, a noticeable slowdown in price growth and, in some cases, slight declines were observed. However, the market appears to have rebounded in many cities post-2021, with renewed price growth evident in the chart. Cities like Bengaluru, Ahmedabad, and Kolkata have shown strong and consistent growth throughout the period, reflecting their status as major economic centres and the sustained demand for housing in these areas. Overall, the Indian housing market has demonstrated robust growth over the past decade, with significant variations between cities. Factors such as economic development, urbanization, and local market conditions have likely contributed to these divergent trends. Despite occasional slowdowns and the impact of global events like the pandemic, the overall trajectory of house prices in India has been strongly upward, pointing to the continued importance of real estate as an economic driver and investment option in the country.
References
- DBIE. (n.d.). https://data.rbi.org.in/#/dbie/home
- Housing Price Index: jointly developed by Indian School of Business and Housing.com. (n.d.). https://www.housingpriceindex.in/
- Liberto, D. (2024, July 2). Understanding the House Price Index (HPI) and how it is used. Investopedia. https://www.investopedia.com/terms/h/house-price-index-hpi.asp
- Pti. (2024, August 30). All-India house price index moderates to 3.3 pc in Q1 FY25: RBI Data. The Economic Times. https://economictimes.indiatimes.com/news/economy/indicators/all-india-house-price-index-moderates-to-3-3-pc-in-q1-fy25-rbi-data/articleshow/112931654.cms?from=mdr
About Author
Pankaj Chowdhury is a former Research Assistant at the International Economic Association. He holds a Master’s degree in Demography & Biostatistics from the International Institute for Population Sciences and a Bachelor’s degree in Statistics from Visva-Bharati University. His primary research interests focus on exploring new dimensions of in computational social science and digital demography.
Akash Dey is a former Sales Executive at Alpine Health. He holds a Bachelor of Business Administration (BBA) from B.P. Poddar Institute of Management and Technology. His key areas of expertise include Decision-Making, Communication, Market Research, Product Marketing, Business Development, and Marketing Strategy.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of 360 Analytika.
Acknowledgement: The author extends his gratitude to the Reserve Bank of India for providing data support.
This article is posted by Sahil Shekh, Editor-in-Chief at 360 Analytika.
