Property Prices in India fall by 4.3% in January 2010 says Makaan.com Property Index (MPI)
Empowering homebuyers and industry players through Makaan.com Property Index
1. Makaan.com, India’s fastest growing online real estate website by People group has launched country’s first Property Index. Christened Makaan.com Property Index (MPI) the tool is aimed at empowering homebuyers and industry players with up-to date information related to movement in residential property prices. This tool will assist the homebuyers to make an informed decision, when he/she heads out to buy their dream home. MPI aims to provide a direction to the buyer so that they invest their hard earned money in the right manner.
2. Makaan.com Property Index (MPI) is part of a bigger initiative known as MakaanIQ that has been bringing out property intelligence & research reports for the benefit of homebuyers and real estate industry.
Makaan.com Property Index Methodology
3. Coverage: Makaan.com Property Index tracks property price trends nationally and for major metros and tier II cities of India.
4. Frequency: Monthly – Starting Jan 2009
5. Database: This index is based on minimum database size of 20,000 data points every month and the analysis has been drawn over a period starting Jan’09. The prices of properties are obtained across micro-markets through property listings on the website as well as Makaan.com’s nationwide sales force.
6. Index Algorithm: The complex algorithm takes into account the property prices as base and then factors in the demand and supply of residential properties for each of the cities covered by it. Care has been taken to give weight age to cities in line with the size of underlying property market.
Makaan.com Property Index – National
Monthly Trend: The Index in January 2010 stands at 1080. This is 4.3% lower than December 2009 when the MPI was 1128. This indicates some softening in property prices.
Quarter Analysis: Over the last 3 months, the MPI has seen a flattish trend; it has moved from 1098 in October 2009 to 1080 in January 2010 a small 1.7% drop. The month of November 2009 did see property prices moving up in the wake of renewed optimism in the economy but post the euphoria in November 2009, which also coincided with the festival time, the property market nationally is seeing some correction.
Year-on-year movement: The MPI has moved up 80 points to 1080; an 8% year-on-year increase. The yearly movements in the MPI beautifully depict the sentiment in the real estate sector over the last one year. According to the Index, most Indian cities witnessed a price correction in the first half (Jan-June) of 2009. The National Index slipped from 1000 to 946 during this period, a drop of 5.4%. There has been an upward trend from thereon peaking in November 2009 and then again seeing some rationalization in property prices.
City level: At the city level, Mumbai has seen a close to 10% fall in property prices between December 2009 and January 2010, and has contributed to towards the fall in the National Index. This is followed by Pune & Delhi, which have seen a 5% & 3% fall respectively in the same period. Property markets of Chennai & Hyderabad have seen some improvement month-on-month at 10% & 5.1% jump respectively. The prices in Bangalore & Kolkata have remained largely unmoved over the last month.
Going Forward: The Budget for FY2011 has given an additional Rs. 50,000 p.a. in the hands of the home buyers (people drawing salary of 8 lac +) through tax savings. At the same time, the 1% subsidy on interest rate for housing loans upto 10 lacs has been extended. One needs to see how the home buyers and suppliers react to these provisions.