The Reserve Bank of India (RBI) is expected to finalise a quarterly Housing Startup Index (HSUI) by the end of this year, to track construction in the sector. It is to be patterned on the Index of Industrial Production (IIP), which indicates industry numbers in the gross domestic product.
HSUI would track growth and decline in construction of new houses. It would serve as an indicator of economic growth, a person in the know said. An increase in the number of houses getting started will indicate an increase in investments, business and consumer optimism, he added.
RBI is learnt to have given the contract for this project to property research firm PropEquity. The latter is to collect the data on housing starts by visiting sites across cities. Samples will be drawn from the permits issued for new residential buildings during two reference years, 2009 and 2010.
RBI did not respond to a questionnaire sent by Business Standard on the subject. PropEquity, too, declined comment.
The index is aimed at helping developers ascertain the risk of building houses in a particular area. The HSUI is likely to cover new residential projects in a mix of Tier-I, II and III cities.
America, Britain, Germany, Canada and Australia have indices on the lines of HSUI. In India, the National Housing Bank (NHB) comes out with a quarterly index called Residex, which indicates the demand, supply and prices of residential real estate across major cities. NHB has been gradually increasing the coverage of cities for this index.