NHB Residex: real estate price index in India

The National Housing Bank (NHB) has launched an index that seeks to track real estate price growth in major cities in India. It is intended to be a broad guide to identify real estate price trends in various areas. The index is called NHB Residex and is expected to be calculated every six months. The first data set tracks prices in key cities between 2001 and 2005:

Residex for select cities (source NHB) - Data for 2001/2002/2003/2004/2005

Delhi: 100 106 129 150 201

Mumbai: 100 116 132 149 178

Kolkata: 100 115 129 148 172

Bangalore: 100 133 170 224 275

This data confirms that all key markets showed significant price rise, with Bengaluru (Bangalore) showing the highest growth rate driven by the IT and BPO businesses. The next set of data is expected in early 2008.

Over the last few years, action has also moved to other cities and smaller towns in India. In fact, some leading developers like Mantri Developers (partners with Morgan Stanley Realty) have indicated that growth in Chennai and Hyderabad is expected to be greater than Bangalore in the near future.

Given growth expectations of the Indian economy, investing in real estate would continue to form an important part of an investor's portfolio.