The India Apartment Index rose 3% during April-June 2011 quarter compared to the previous quarter, the “PropIndex, the India Apartment Index”, launched by Magicbricks.com, rated as India’s No. 1 property portal showed.
The index is an aggregation of price and supply trends across 11 cities and is based on data mined from the back-end of the property website. The report will be released by Magicbricks.com on a quarterly basis.
In each city report, four key metrics have been covered – PropIndex (which is a composite index of capital appreciation, supply and apartment rates), Price Monitor (which shows capital appreciation), Rent Monitor (which should rental appreciation) and Yield Monitor (which shows the rental yields within each city).
“PropIndex is a culmination of the efforts that we have been putting to provide unbiased advice on property market performance to our users. It has the best of authentic site-data and original content thereby rendering itself an excellent source of credible information for property-led decision making for both users as well as the developer/realtor community,” said Sudhir Pai, Business Head for Magicbricks.com.
PropIndex has been able to address the two key challenges to setting up of an Index in the real estate space – availability of sufficient sample data at a locality level and its authenticity. As India’s largest property portal, Magicbricks had the largest pool of data available, sourced from over 5,000-plus properties that get posted daily by a base of over one lakh users covering over 300 cities and over 3,500 localities in the country. Over four lakh property listings are available at any point of time with a base exceeding 6000 clients ensured that a statistically relevant sample data for this exercise.
A smart algorithm that was created ensured the right data selection and removal of statistical anomalies; additionally, the large pool of industry experts on Magicbricks have validated the findings of the Index thereby attesting to data authenticity.
The main finding is that property prices have maintained an uptrend in most cities, which has been captured by Price Monitor of respective cities. Over 50% of the localities across the cities have shown uptrend in average capital values. However, in rental market over 65% of the localities across cities have shown rise in rental values.
Of the 11 cities covered in PropIndex, eight have shown uptrend in values. Cities such as Delhi, Kolkata and Bangalore have registered maximum increase in average capital value per square foot. In cities such as Delhi, where increase in capital values primarily attributed to large-scale of redevelopment in old localities and limited new supply in the market. Where new areas have been developed such as Dwarka, there have been a significantly large number of properties for sale in the market.
Since economic drivers have been good in most cities, majority of cities had portrayed uptrend in the property price values in the quarter April-June 2011 and the same have been captured by Price Monitor of respective cities.
Over 50% of the localities across the cities have shown uptrend in average capital values. However, in rental market over 65% of the localities across cities have shown rise in rental values.
Another big contributor to the growth or decline has been the newly developing corridors of growth where the available supply for sale and rent has increased significantly. Capital values are significantly impacted when new transport infrastructure such as flyovers and metro are either announced or become operational. Rental values too change with input of infrastructure. Yields for low ticket investments are higher than those with higher capital values.
