An In-Depth Look at the RBI's House Price Index

What is the RBI's House Price Index (HPI)?

The RBI's House Price Index (HPI) is a quarterly measure that tracks the fluctuations of residential property prices across ten prominent cities in India. These cities include Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow, and Mumbai. The index is derived from actual transaction data collected from housing registration authorities.

Why does the RBI publish the HPI?

The HPI fulfills several critical roles:

• Monitoring the Real Estate Market: It offers valuable insights into price trends and dynamics within the housing market.
• Financial Stability: It aids in assessing the health of the real estate sector and its potential impacts on the financial system.
• Monetary Policy: It informs monetary policy decisions by providing data related to inflation in the housing sector.
• Academic Research: It serves as a vital resource for researchers focusing on the housing market.

How is the RBI's HPI calculated?

The HPI is computed utilizing a chain-linked index methodology, with a base year set at 2010-11. This approach means that price variations are gauged relative to the preceding quarter, and these changes are interconnected to produce the overall index.

Where can I find the RBI's HPI data?

The RBI publishes the HPI data on its official website. Typically, you can locate it within the publications section, often nestled within statistical reports or specialized releases concerning the housing market.

How frequently is the HPI updated?

The HPI is refreshed on a quarterly basis, ensuring that the data remains current and reflective of market conditions.

What is the difference between the RBI's HPI and the NHB's Residex?

While both indices serve to track housing prices, they exhibit several key differences:

• Data Source: The HPI utilizes transaction data, whereas Residex relies on registered property values.
• Coverage: The HPI encompasses 10 major cities, while Residex extends to 50 cities, with plans for further expansion.
• Base Year: The HPI employs 2010-11 as its base year, while Residex uses FY 2017-18.
• Market Focus: The HPI primarily targets the primary market (new properties), while Residex includes both primary and secondary markets.

Why does the HPI cover only 10 cities?

The HPI currently concentrates on 10 major cities due to the availability of reliable and comprehensive transaction data from housing registration authorities in these locations. The RBI is actively working to broaden the coverage as data availability improves in other areas.