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Govt To Float Price Index For Housing Projects
property vertical
New delhi: Is the broker quoting too high a price for a house in Gurgaon or in Navi Mumbai? To provide a more satisfactory answer to such perplexed queries from the middle class, the government will be floating the first ever Housing Price Index in the country. The index may even track variations in prices in different locations within a city, to make it more useful for consumers. India will only be the third country in the world after the US and UK to have such an index. To ensure that the index has wide acceptability, the ministry will be issuing the series very soon. The index will track the extent of inflation taking place in housing prices across the country. Since a single measure could hide wide variations, the government is planning to make it flexible enough to track local variations too. It will be rolled out in Delhi in the first phase. The technical support for the index has been provided by the National Housing Bank.According to Anuj Puri, MD of TrammellCrowMeghraj, such an index could bring in a lot of transparency in the sector. “But it’s a challenging project and data is a big problem,” he said.Government sources said the idea is to bring about some order in the disorganised real estate pricing scene in the country. At present, a buyer has no means to judge whether a rise in property price is in sync with the general level of inflation in the country, or has been scaled up disproportionately. Other than quotes from brokers, there are no means at present to evaluate the changes in prices in this sector. This will also help banks to estimate if the loan applications for properties are realistic. Accordingly, they can extend the analysis to get a fix on the possibility of a property buyer running into repayment problems. This will also ensure that the level of non-performing assets in the sector does not shoot up. The ministry will present the index as a working paper. The index may at present be rolled out on a quarterly basis in a year. Subsequently, after the government identifies which agencies would be responsible for bringing out the index, it could be turned into a monthly interval. The only index, which gives some idea of the price line for the housing sector, is the consumer price index for industrial workers. But here too it’s a national level figure that blurs regional differences
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