Property prices in Mumbai correct by 10% 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 – Mumbai
Monthly Trend: The Mumbai MPI in January 2010 stands at 1122, a 10% drop from December 2009. This drop has been caused by price correction in specific micro-markets within Mumbai which have seen a steep price correction while other micro-markets have been relatively stable.
Quarter Analysis: The Mumbai MPI in the last 3 months clearly shows the volatility in the Mumbai property market. From October 2009, the MPI in Mumbai has seen a close to 13% correction. November 2009 did see property prices moving up in the wake of renewed optimism in the economy but post that, the property market in Mumbai is seeing price corrections.
Year-on-year movement: The MPI in Mumbai has moved up 122 points to 1122, a 12% year-on-year increase. The yearly movements in the MPI for Mumbai beautifully depict the sentiment in the real estate sector over the last one year. As per the Index, Mumbai witnessed a price correction in the first quarter of 2009. With the economy showing signs of improvement, property prices in Mumbai started an upward rally from then on, which peaked in October-November, post which we are again seeing some rationalization in property prices in Mumbai.
National Index: Between December 2009 and January 2010, the National Index saw a drop of 4.3%, driven by the steep drop in Mumbai and a small 5% drop in Delhi.
Going Forward: The Mumbai property market has seen price corrections 2 months in succession. Micro-market level analysis showed that some micro-markets in Mumbai are seeing recovery in property prices, which should show in the February Index. But one needs to see how the property seekers and suppliers react to the Budget in March, which has given an additional Rs. 50,000 p.a. in the hands of the homebuyers through tax savings and has also extended the 1% subsidy on interest rate for housing loans upto 10 lacs.