Time to buy property in Faridabad, Gurgaon and Noida - says Makaan.com Buy vs. Rent Index (MBRI)
A property seeker in
MBRI is a tool that aims to help property seekers make informed choice between buying and renting of property in top Indian cities sub-cities. When it comes to
Buying destinations in Delhi
TTypically if the MBRI for a city / sub-city is between 1-20 it denotes that it is much less expensive to buy a home than to stay on rental in these cities / sub-cities. Property seekers looking at investing here are advised to buy a property than staying on rentals. The current MBRI release identifies
Neutral destinations in Delhi
The Sub-citiy of
Rental destinations in Delhi
According to the report,
If one compares the current MBRI report with the previous report (for period of Jan-March’11) one observes that the current MBRI for
The MBRI for 7 Indian cities and their sub-cities for April - June 2011 are given in the table below
Nationally, the MBRI for
Makaan.com Buy vs Rent Index is the first of its kind in the Indian real estate market, and covers the major Indian cities of Ahmedabad, Bangalore, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune.
Launched in October-December 2010 quarter, Makaan Buy vs. Rent index is a quarterly initiative and will be updated every 3 months. This is the 3rd release of the index findings. The detailed findings can also be accessed at http://www.Makaan.com/MBRI
MBRI is a numerical value, arrived at after taking into account several factors including average capital value of property, average rental value, rental yield, historical capital price movement, historical rental movement and inflation. A low MBRI indicates that it is much less expensive to buy a home than to stay on rental whereas a high MBRI denotes that it is much more expensive to buy a home than to stay on rental. MBRI has been collated both at city and sub-city level.
How to interpret MBRI?
MBRI of 1-20: This denotes that it is much less expensive to buy a home than to stay on rental, in these cities / sub-cities. Property seekers looking at investing here are advised to buy a property than staying on rentals.
MBRI of 21-25: This denotes that it is relatively more expensive to buy a home than to stay on rental, in these cities / sub-cities. This is a neutral range and property seekers looking at investing here are advised to take the final decision based on their financial situation.
MBRI of 25+: This denotes that it is much more expensive to buy a home than to stay on rental, in these cities / sub-cities. Property seekers looking at investing here are advised to rent a property rather than buying.
Selection of cities
Coverage - The MBRI covers Ahmedabad, Bangalore, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune. Other cities may be added in subsequent issues. These cities account for over 80% of the Indian Real Estate market.
Factors that have been taken into consideration while selecting the cities:
Population – The real estate sector is dependent on the demand of houses, which in turn is dependent on the population. Populous and ever growing urban agglomerates like Mumbai and NCR have an ever growing demand for housing.
Economic Importance – Cities which are hubs of certain industries have constant influx immigrants from across the country, which also creates a strong demand for housing – beyond the needs of the resident populations – e.g.
Coverage - Each city is divided in sub-cities (micro-markets) and micro-markets into localities. Prices of properties are obtained across micro-markets through listings on makaan.com as well as makaan.com’s nationwide sales force
Database -The current Index comes from 32 micro-markets across the above cities. The Index is based on minimum database size of 20,000 data points every month
New & Resale properties - The MBRI database includes a good representation of new as well as resale properties. Most reports on the property sector today are based on new developments, whereas actually new properties are relatively small % of the real estate supply with resale being the majority of supply
Index algorithm - The Index is calculated quarter-on-quarter for each of the above cities & sub-cities. It is a derived index using an advanced algorithm which factors in the average value of properties available for sale and rent.