Anu Anna Jo, Senior Associate Research, CPPR, comments on the news “Housing prices show decline in Kochi during Q4FY23: NHB“. The news was published in Times of India on 4th July 2023.

Kochi: Though the data recently released by the Reserve Bank of India (RBI) had recorded remarkable growth in the housing prices in Kochi during third quarter of previous financial year, the housing price index of the National Housing Bank (NHB) shows a decline in the housing prices in the city during the fourth quarter that ended in March 2023.

NHB tracks housing prices of 50 cities, including Kochi and Thiruvananthapuram in Kerala. Housing prices are classified on the basis of carpet area size at city level (Rs/sq ft) for units under three product category levels namely up to 60 sq m, between 60 and 110 sq m and over 110 sq m.
NHB’s residential property price index Residex captures two housing price indices-HPI @assessment prices and HPI@market prices for properties under construction. The former is based on valuation data of residential properties received from banks and Housing Finance Companies (HFCs), while the latter is based on data of unsold stock collected through a market survey collected from project financing details of banks and HFCs.

According to the NHB data (HPI@assessment prices), in Kochi, the average carpet area prices for properties of size up to 60 sq m stood at Rs 7,453/sq ft in the last quarter that ended in March 2023. The price of this segment recorded during the previous quarter that ended in December 2022 was Rs 14,939/sq ft. The carpet area prices of properties above 60 sq m and up to 110 sq m also recorded a decline from Rs 7,156/sq ft in December 2022 to Rs 6,813/ sq ft in March 2023.

The RBI’s All India Home Price Index (HPI) had recorded a steep growth (year-on-year) of 7.1% in the housing price in the city during last year. It is to be noted that unlike the data of NHB, the HPI report of RBI was based on the transaction data received from the registration authorities in the respective city.
According to Real Estate Regulatory Authority of India (Rera) chairman P H Kurien, there is no major decline in the housing price in Kochi. “We should analyse each figure and its source to understand the real situation,” he said.

Credai authorities also have opined that the NHB data is not reliable. “The market trend clearly shows that the housing price is going up in Kochi as the cost of raw materials shoot up. NHB sources are property registration documents in banks which usually hide the original price,” said Credai Kerala chairman Ravi Jacob.

Views expressed by the author are personal and need not reflect or represent the views of the Centre for Public Policy Research.