Construction of residential realty is declining in the metros and picking up in smaller cities and towns, the pilot figures for the country’s first housing start-up index indicate.
The National Buildings Organisation of the Housing and Poverty Alleviation Ministry and the Reserve Bank of India Monday released the index based on 27 cities taking into account new housing permits between 2007 and 2011. The sample will be extended to 300 cities.
“Million-plus” cities such as Kolkata, Chennai and Bangalore show a decline in new housing ventures, while smaller places such as Ahmedabad, Chandigarh and Ghaziabad and Bhopal showed an increase by end of financial year 2011 compared to a few years prior to that. Data from Mumbai and Delhi were not received, the study report says.
In the national capital region, Faridabad had only 346 house project starts in the fourth quarter of 2011, down from 1147 in the fourth quarter of 2010. The same for Ghaziabad showed a sharp rise to 1,614 projects by Q-4 of 2011 from 900 in Q-4 of 2010.
As land became limited, residents of smaller cities and towns started opting for multi-storey apartments towards the beginning of 2007. But in later years, there also emerged a trend of single-housing units being preferred outside the hearts of cities, notably Bangalore.
“The index has a 98 per cent accuracy vis a vis population growth in areas as per the 2011 census corresponding with the growth pattern in housing. In smaller towns where population increased, there was a growth in housing; that in big cities was down. It acts as an indicator of growth and serves as a warning signal for the policymakers of the economy,” D S Negi, director and head of National Buildings Organisation, told The Indian Express.
India is the world’s seventh country and the only developing nation to use such an instrument. Internationally the index serves as a tool to measure the health of banking, mortgage, steel, and labour.
“Only Canada, the United States, Japan, France, Australia and New Zealand are compiling data related to housing starts, on a regular basis. In India, this will be a proper indicator of growth,” said Girija Vyas, Minister for Housing and Poverty Alleviation, releasing the findings.