Running head: Investing is Housing Market in India 1

Investing is Housing Market in India

Sudhanshu R. Sahoo

Heramba Chandra College

Sudhanshusahoo206@gmail.com
Investing is Housing Market in India 2

Abstract

The housing market in India has been a subject of interest for investors in recent years, as the

demand for housing has increased significantly due to the growing population and urbanization.

This paper aims to provide an investment analysis of the housing market in India, considering

various factors such as demographic changes, economic indicators, market trends.

The study looks over all the market conditions that directly or indirectly affects the housing

market. The Indian housing market has a high potential for growth, driven by factors such as

increasing urbanization, rising income levels, and a favorable regulatory environment. The

demand for affordable housing in the country is also expected to increase, as the government has

launched several initiatives to promote affordable housing and improve the housing

infrastructure. However, the study also identifies some challenges and risks associated with

investing in the Indian housing market.

Overall, the study suggests that investing in the Indian housing market can be a lucrative

opportunity for investors, but they need to carefully evaluate the market dynamics and adopt a

long-term investment strategy to achieve optimal returns. The paper concludes by highlighting

the need for further research in this area to develop more nuanced insights into the Indian

housing market and its investment potential.

Keywords: Housing market, urbanization, demographic changes, rising income level, affordable

housing, market dynamics, optimal returns, investment potential

Investing is Housing Market in India 3

Introduction

The housing market refers to the buying and selling of residential real estate properties, such as

houses, apartments, and condominiums. The housing market is an important component of the

economy and has a significant impact on the financial well-being of individuals and

communities.

The housing market in India has been growing steadily over the past few decades, fueled by a

rapidly growing population and a rising middle class. India's housing market has seen a surge in

demand due to the increasing urbanization of the country and the resulting need for housing.

The Indian housing market is primarily divided into two segments: affordable housing and

luxury housing. Affordable housing is aimed at middle and low-income groups, while luxury

housing caters to the high-end market.

The Indian government has also taken several initiatives to boost the housing market, including

the Pradhan Mantri Awas Yojana (PMAY) scheme, which aims to provide affordable housing to

all by 2022. The government has also introduced several other policies and incentives to promote

the development of affordable housing, such as tax benefits and subsidies.1

1
According to Pradhan Mantri Awas Yojana (PMAY) scheme, as of 2023 122.69 lakhs houses
have been sanctioned and a total of 8.31 lakh crore have been invested
Investing is Housing Market in India 4

Despite the growth of the housing market, there are still several challenges that need to be

addressed, such as lack of affordable financing options, high property prices, and inadequate

infrastructure in some areas. However, with the government’s efforts and the continued growth

of the middle class, the Indian housing market is expected to continue to grow in the coming

years.

Brief review of literature

The housing market in India has been a popular topic of research for investors and analysts alike,

given its potential for high returns and stability. Here is a brief literature review of investment

analysis of the housing market in India:

1. “Investment Analysis of Residential Real Estate Market in India” by Manish K. Singh

and Archana Singh: This study analyzes the residential real estate market in India using a

sample of 30 cities from 2011 to 2016. The study finds that the real estate market in India

has been stable, and investment in the residential real estate market in India can yield

high returns and recommends that investors should invest in Tier-II cities for better

returns.

2. “Housing Price Indices in India” by Charan Singh: This study provides the brief

knowledge about how the housing price indices are calculated in India and a few other

countries. This paper also investigates the growth of the housing market. The study also

compares different types of indices such as REIS, Residex and HPI.

Investing is Housing Market in India 5

3. “Investment Analysis of Indian Real Estate Sector: An Overview” by R.K. Uppal and

Anuradha: This study provides an overview of the Indian real estate sector and analyzes

the investment opportunities in the sector. The study finds that the Indian real estate

sector has been growing steadily and has a high potential for investment.

Overall, these studies suggest that the housing market in India provides significant investment

opportunities and can yield high returns. However, investors should carefully consider various

factors, such as location and property type, before investing in the Indian housing market.

Important points to Consider

Housing market is an important sector in any economy. The development of housing

sector has a direct impact on employment generation, GDP growth and consumption pattern in

the economy. But before diving into the housing market, one must take into consideration several

factors. Now, housing can be a good investment in some circumstances, but there are several

reasons why it may not always be the best choice:

1. Lack of diversity: Real estate is a single asset class, so investing all your money in

housing means you have no diversification. Diversification is very important when it

comes to investing as the more diversified your portfolio is the less is your risk.
Investing is Housing Market in India 6

2. High Home Prices: Home prices have been increasing rapidly in recent years, making

it more difficult for potential buyers to enter the market. This high price point may

make it harder for individuals to afford homes and may deter potential buyers.2

3. Limited liquidity: real estate is a relatively illiquid investment, meaning that it can

take time to sell a property and convert it into cash. This can be problematic if you

need quick access to funds.

4. Maintenance costs: owning a property requires ongoing maintenance and repair costs,

which can add up over time. These costs can significantly impact your net returns,

particularly if you are renting out the property.

5. Risk of housing bubble: The housing market can experience periods of road

appreciation, followed by a sharp decline in value. This can result in significant losses

for investors who have overpaid for property during the boom period.

6. Exit strategy: Have a clear exit strategy in mind before making any investment

decisions, such as selling the property at a profit, renting it out for a steady stream of

income, or holding it as a long-term investment.

A market such as real estate can be good investment under certain conditions, such as

stable market and low interest rates, it is not always the best choice for everyone. It is

2
According to Times Property, home prices are predicted to increase by over 7% nationwide.
Investing is Housing Market in India 7

essential to weigh potential risks and benefits carefully before making any investment

decisions.
Investing is Housing Market in India 8

Methodology

There are several methods that can be used to assess the performance of a housing

market. Some of the most common ones are:

1. Sales Volume: This method looks at the total number of homes sold in each period,

usually monthly or quarterly. It can be an Indicator of the level of activity in the

market and how many people are buying or selling homes.

2. Housing Price Indexes: This method looks at changes in housing prices over time. It

can be used to track trends in the market and identify periods of growth or decline.

3. Housing Affordability Index: This method measures the ability of the average

household to afford a median-priced home in the area. It can be used to determine

whether the market is becoming affordable for potential buyers.

4. Mortgage Rates: Majority of people take home loans in order to buy a house. For this

case the mortgage rates are to be checked before determining whether it would be

worth it to invest into the housing market.

5. Days on Market: This method measures the average length of time it takes for a home

to sell in each market. It can be an indicator of how quickly homes are moving off the

market and whether demand is increasing or decreasing.

Investing is Housing Market in India 9

6. Rent vs Buy Analysis: This method compares the costs of renting versus owning a

home in each market. It can be used to determine whether it makes more financial

sense to rent or buy a home.

7. Demographic Trends: This method looks at changes in the population, income levels,

and employment rates in each market. It can be used to identify trends that may

impact the housing market, such as an increase in demand for rental properties due to

a growing population.

8. Comparative Analysis: A comparison is to be conducted to see how the housing

market have performed compared to other investment instruments such as stocks,

bonds, etc. Over a certain period.

By using a combination of these methods, it is possible to get a comprehensive picture of

the performance of a housing market and make informed decisions about buying or selling

property in that market.

Investing is Housing Market in India 10

Sales Volume

The sales volume of the housing market in India can vary depending on various factors such as

economic conditions, government policies, and the overall demand for housing,

According to a report by PropTiger.com, a real estate services firm, the total sales volume of

residential properties in India increased by 8% in the financial year 2021 compared to the

previous year. The report states that a total of 1,81,370 homes were sold in the top 7 cities in

India, which include Mumbai, Delhi-NCR, Bangalore, Pune, Hyderabad, Chennai, and Kolkata.3

However, it is important to note that the COVID-19 pandemic has had a significant impact on the

real estate market in India, with a decline in sales volume during the lockdown period. The

market has since recovered, but the overall impact of the pandemic on the real estate sector in

India is still being assessed.

3
According to PropTiger.com, the demand for affordable housing has increased, with homes

priced under INR 45 lakhs ($60,000) accounting for 47% of the total sales in the financial year

2021.
Investing is Housing Market in India 11

Graph 1: Bar Graph Showing the Change in Sales Volume of Housing Units

Housing units (in 1,000s)

350 329.24

300 279.82
267.96
244.69 242.33 245.86 232.9
250 228.07
215
200
154.43
150

100

50

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: Statista

As shown in the above chart, there has been a constant decline in the sales volume of the housing

units with a sudden dip in 2020, due to covid 19. 2021 saw a decent recovery, although still less

than the figure in 2019. As per 2022 the sales volume was at 215,000, again less than that the

value of 2021. It is predicted that the sales volume will increase in 2023 looking at current

market trends.

It is important to consider the current state of the economy and the housing market. If the

economy is strong, with low unemployment and steady economic growth, the housing market is

likely to be stable or even thriving. On the other hand, if the economy is struggling, with high

unemployment and slow growth, the housing market may be weak or experiencing a downturn.
Investing is Housing Market in India 12

RBI’s Housing Price Index (HPI)

Trends in all-India HPI and its constituent Cities were also disseminated regularly by the RBI.

The price data on transacted houses while registering of a house are collected from the

Registration Departments of respective state governments. This approach attempts to develop a

house price index based on registration price data and stratified weighted average measures,

where transactions are Stratified in three categories, viz., small, medium, and large houses and

different geographical Wards/zones. However, this measure captures prices relating only to those

houses that are sold during a Period and not relevant to all houses in the economy.

Table 1: HPI for Selected Cities

Source: NHB Residex

Investing is Housing Market in India 13

Graph 2: Line Graph Representing the Rise in HPI

200
HPI of selected cities
180

160

140

120

100

80

60

40

20

0
Mar- JUN SEP- DEC Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec-
- -- - - 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022
2018 2018 2018 2018

Ahmedabad Bengaluru Chennai

Hyderabad Kolkata Mumbai
Source: NHB Residex

From the above chart and the corresponding line graph the HPI is increasing although after

facing slight decline during the COVID 19 period.4

4
According to Indian Express, RBI’s HPI recorded a 2.79% growth to 302 in the third quarter as

compared to 293.8 when it showed a 3.1% growth a year ago despite the rise in interest rates.
Investing is Housing Market in India 14

It’s also worth noting that even if the HPI is high, there may still be opportunities to find a good

deal, such as buying a house that needs renovations or negotiating with the seller. It’s important

to do your research and work with a trusted real estate agent to help you navigate the housing

market and make an informed decision.

Housing Affordability Index (HAI)

The Housing Affordability Index (HAI) is a measure used to determine whether the typical

household can afford the typical home in a particular area. It is typically calculated by taking the

median home price in a particular area and dividing it by the median household income. The

resulting ratio Indicates the percentage of a typical household’s income that would be required to

purchase a typical home in that area.

A higher HAI Indicates that housing is more affordable, while a lower HAI indicates that

housing is less affordable. The HAI can be used by policymakers, researchers, and individuals to

track changes in housing affordability over time and to make informed decisions about housing-

related issues.

Factors contributing to the decline in HAI in India include rising house prices, stagnant incomes,

and high interest rates. Additionally, supply-side issues such as a lack of affordable housing stock

and inefficient land use policies have also contributed to the problem.
Investing is Housing Market in India 15

Graph 3: Housing Affordability Index of Selected Cities

HAI
Mumbai
Delhi
Chennai
Pune
Bengaluru
Hyderabad
Jaipur
Kolkata
Ahemdabad
Surat

0 10 20 30 40 50 60 70 80

Source: Business-Standard

Note: Higher HAI indicates greater affordability

Over the years, the HAI for India fluctuated between 50 and 70, indicating that housing

affordability in India remained a challenge. Although it should not be the only concern while

buying a house. For example, although the HAI of Mumbai is the lowest at 28.2, the demand of

real estate in Mumbai is also high meaning it would build high equity over time and at the time

of selling, it could fetch a good return on investment. But the result is not guaranteed it

completely depends upon the risk appetite of the investor.

Investing is Housing Market in India 16

Mortgage Rates

Mortgage rates in India are determined by the Reserve Bank of India (RBI) and are influenced by

various factors such as inflation, economic growth, and market conditions.5 The interest rates on

mortgages in India can be either fixed or floating. Fixed-rate mortgages offer a stable interest

rate for the entire loan tenure, while floating-rate mortgages are linked to a benchmark rate and

can vary depending on market conditions.

Graph 4: Average Mortgage Interest Rates in India

Average Mortgage Interest Rates

12.00%
10.30% 10.15%
9.80% 9.50%
10.00%
8.65% 8.80%
8.35%
8.00% 7.15% 7.25%

6.00%

4.00%

2.00%

0.00%
2013 2014 2015 2016 2017 2018 2019 2020 2021

5
According to Bank Bazar, as of 2021, the average mortgage interest rate in India ranged from

6.65% to 7.25% depending on the lender and the type of loan.

Investing is Housing Market in India 17

Source: Bank Bazaar

From the above graph, the mortgage rates have been decreasing over time. This could be a

positive factor when it comes to buying a property using housing loan but even here certain

matters should be considered:

 Loan Tenure: One should consider how long will it take them to repay the loan. If the

interest rate is high, it is advisable to repay the loan as soon as possible.

 Down Payment: It is important to have enough savings to make sustainable down

payment, as this will lower the amount of the loan and the interest paid over time.

 Loan Type: There as various types of housing loans available such as fixed rate loans,

floating rate loans, and hybrid loans. By looking at the current market trend it could be

said that a floating rate loan would be a more viable option when compared to fixed rate

loan.

Days on Market

Days on market (DOM, alternatively active days on market, market time, or time on market) is a

measurement of the age of a real estate listing. The statistic is defined as the total number of days

the listing is on the active market before either an offer is accepted or the agreement between real

estate broker and seller ends.

Investing is Housing Market in India 18

The days on market for residential properties in India can range from a few weeks to several

months.6 But it should not be the only concern of the investor as other economic factors also

come into play. For example, if a particular city is experiencing a surge in population growth and

a booming economy, it may be a good time to invest in the housing market, even if the days on

market for properties is slightly higher than average.

Thus, days on market can be used as a tool to determine the demand for real estate in a particular

geographical location. A low number of days on market may indicate a strong demand for homes

in a particular area, while a high number of days on market could suggest that the market is slow

or oversaturated.

Graph 5: Average Days on Market of Selected Cities

16
Time taken(in months)
14
13.5 13.5
12

10 11
10.5 10.5 10.5
10
8

0
Mumbai Delhi-NCR Bangalore Chennai Hyderabad Pune Kolkata

Source: Business Today

6
. According to a report by PropTiger.com, the average time taken to sell a property in the top 9
cities in India was around 10-12 months in 2020, with the highest being in Mumbai at 16 months and the
lowest being in Hyderabad at 6 months.
Investing is Housing Market in India 19

Above show graph shows the days on market of a few cities. Similarly, before investing in the

real estate of any area, one should what is the days on market of that area to get an idea how long

will it take them to sell it.

Rent vs Buy Analysis

Rent vs buy analysis is a financial analysis that compares the costs and benefits of renting versus

owning a property over a certain period. This analysis considers various factors, such as the cost

of renting or buying, the length of time you plan to stay in the property, the interest rates, and the

potential appreciation or depreciation of the property’s value.

The goal of a rent vs buy analysis is to determine which option is the most financially beneficial

for you based on your unique situation. The analysis will compare the total cost of renting a

property over a certain period to the total cost of owning a property over the same period,

including the initial down payment, mortgage payments, property taxes, and maintenance costs.

The following procedure must be done in order to conduct Rent vs Buy analysis –

1. Determine the Time Horizon: The first thing to do is to determine how long do you plan

to stay in the property. If you’re planning to stay for a long time, it might make more

sense to buy rather than rent.

2. Determine your Budget: One should determine how much they are able to afford to spend

on either buying or renting a property as this will help in narrowing down the options.
Investing is Housing Market in India 20

3. Research the real estate market: Do a thorough analysis of the market to see the current

trends in the market and the average prices of properties and find one suitable to your

budget

4. Estimate the cost of Buying: Cost of buying includes purchase price, down payment, and

any other fees associated with buying the property. One should also consider ongoing

costs such as mortgage payments, property taxes, insurance, and maintenance costs.

5. Estimate the cost of Renting: Cost of renting includes monthly rent, security deposit, and

any other fees associated with renting. One should also consider expenses such as renters’

insurance and utility costs.

6. Calculate the financial impact of owning: When you buy a property, you are building

equity over time. You should calculate the potential appreciation of the property and the

potential tax benefits associated with owning a property.

7. Compare the costs of renting vs owning: Once you have estimated the costs of buying

and renting, you can compare the two to determine which option is more cost-effective.

8. Decide: Based on the analysis, you should be able to make an informed decision on

whether to rent or buy the property.

Investing is Housing Market in India 21

In conclusion it is essential to note that buying a property is more feasible when you’re

considering living in it for the long term. Otherwise renting could be a better option if you’re not

planning to permanently live there.

Demographic trends

Various demographic trends affect the Indian housing market, some of which are:

1. Urbanization: India’s urban population has been growing steadily, and it is expected to

reach 600 million by 2030. This growth is leading to an increased demand for housing in

urban areas.

2. Young population: India has a large population of young people, with more than 65% of

the population under the age of 35. This demographic group is likely to drive demand for

affordable housing in the coming years.

3. Nuclear families: The trend of nuclear families, where a couple and their children live

separately from their extended family, is becoming more common in India. This is

leading to an increased demand for smaller, more affordable housing units.

4. Rising income levels: India’s middle class is growing, and with it, their purchasing

power. This has led to an increase in demand for larger, more luxurious homes.
Investing is Housing Market in India 22

5. Migration: India has a large population of migrant workers who move from rural areas to

cities in search of employment. This is leading to an increased demand for rental housing

in urban areas.7

Overall, the housing market in India is likely to be influenced by these demographic trends in the

coming years. Developers and policymakers will need to keep these trends in mind while

planning new housing projects and policies.

Graph 6: Net Migration of People in India

7
According to Macrotrends, the net migration for India was -0.356 per 1000 population, a 3.52%
decline from 2020
Investing is Housing Market in India 23

Net Migration(in thousands)

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
-50

-100
-142
-150 -158

-200

-250 -266 -266 -271

-282 -280 -285 -288
-296
-300

-350

Source: United Nations Department of Economic and Social Affairs

The negative values suggest that there is more emigration from India than Immigration to India.

This indicates that India is experiencing a net loss of people due to migration.
Investing is Housing Market in India 24

Graph 7: Inter State Migration in India

Source: Economic Survey of India

The above diagram shows the number of people moving in and out of each state in India. The

states with high immigration will have more demand for houses than those with high emigration.

Thus, selling houses in these states will be comparatively easier.

Investing is Housing Market in India 25

Comparative Analysis

There is a variety of investment instruments, Stocks and real estate have the potential to provide

high returns but are also subject to market fluctuations and require significant capital. Bonds and

FDs are considered less risky but offer lower returns. Nifty 50 provides investors with exposure

to the Indian stock market without the risks of investing in individual stocks. Investors should

carefully consider their investment goals, risk tolerance, and financial situation before investing

in any of these asset classes.

Table 2: Performance of Various Investment Instruments in India (Returns in %)

Year Stock Nifty 50 Bonds Real Estate Fixed

Deposit

2013 8.9 6.86 8.2 7.66 8.61

2014 29.89 31.39 9.54 4.69 8.31
2015 -5.03 -4.11 7.91 3.03 7.81
2016 1.94 3.01 7.94 5.32 7.15
2017 27.91 28.65 6.65 6.89 6.2
2018 6.41 3.16 6.9 4.35 6.77
2019 14.38 12.97 10.33 2.85 6.84
2020 -15.47 -7.45 5.27 1.55 5.49
2021 24.17 17.88 4.85 4.05 4.9
2022 19.06 16.56 4.98 5.36 4.69
Source: BSE Sensex, FIMMDA-NSE MIBOR Index, NHB Residex
Investing is Housing Market in India 26

Graph 8: Comparison of Different Investment Instruments

Peformance of Investment Instruments

40 %

30 %

20 %

10 %

0%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

-10 %

-20 %

Stock Nifty 50 Bonds Real Estate Fixed Deposit

S

ource: BSE Sensex, FIMMDA-NSE MIBOR Index, NHB Residex

From the above graph we can see the performance of various investment instruments in the last 10

years. Although real estate is a risky asset, the return on investment does not justify the risk. We see

dips in returns in housing market in the year 2015 and 2020. Granted Stocks and Nifty 50 have also

performed similarly but the return on investment they provide is way more than real estate. Even if we

compare estate with safer alternatives such as bonds and FDs, we can see that they have performed

better than real estate as they did not face any decline even during the year 2015 and 2020.
Investing is Housing Market in India 27

Conclusion

In conclusion it could be said that investing in the housing market is a long-term commitment so

a thorough research prior to that is necessary. It is without a doubt a risky asset and if not bought

with proper analysis of cost over the long term, could turn into a liability. Many factors play a

role while determining whether investing in the housing market would be feasible or not.

Sales volume have been seeing a constant decline in the housing market meaning the level of

activity has been decreasing over the years. This could an indication that one you buy a property

it could take some time to liquidate that asset and get back your money invested. It also depends

upon the days on market of that area. The more the days on market of an area, the longer it will

take you to sell that property.

The Housing Price Index (HPI) of many cities in India have seen a steady increase over the years

which is a good sign as a high HPI means that the value of the real estate will grow over time.

Apart from HPI, Housing Affordability Index (HAI) is another thing one should consider before

investing in the housing market. It reflects how affordable the real estate of a particular area is.

One should choose such a property which lies in an area which is high in both HPI and HAI to

get maximum returns easily.

Other factor such as demographic trends also play an important role. If we could see the net

migration of a certain area, we could determine the size of the market. In India, the net migration
Investing is Housing Market in India 28

is seeing a negative trend over the few years so that could be a concern before investing in the

Real estate market.

If you want to invest in housing market are not ready to put in a hefty sum of money for a long

term, the best option will be to invest in Real Estate Investment Trust (REIT). Buying and selling

of REIT shares is easier than it is with a physical property. They obviate the need for market

specific knowledge and property management while making it easier to diversify your real estate

portfolio.8

8
According to Emerald.com, the percentage of Indian REITs in a portfolio goes from 9% at the
smallest risk level to 19% at the maximum risk level. This shows that including Indian REITs in a
diversified portfolio of assets is an effective way to spread out the risk.
Investing is Housing Market in India 29

 References

 Economic Survey of India (2023)

 Sane, R Thomas, S. (2018), “Housing affordability and housing market dynamics in

India”.

 Shukla, S. and Singh, S. (2019), “Indian housing market: A study of housing finance and

its impact on affordable housing”.

 Jain, J and Neha Singh, N. (2021), “A study on the impact of economic indicators on the

Indian real estate market”.

 National Housing Bank, Annual Reports.

 “Ramesha, K. and Devaraja, T.S (2020), “An analysis of the Indian housing market and

the role of the government”.

 National Housing Bank (2023), “NHB RESIDEX: Tracking the prices of residential

properties in India”.

 Singh, S. (2015), “Housing Prices Indices in India”

Investing is Housing Market in India 30

Footnotes

1. According to Pradhan Mantri Awas Yojana (PMAY) scheme, as of 2023 122.69 lakhs houses have
been sanctioned and a total of 8.31 lakh crore have been invested

2. According to Times Property, home prices are predicted to increase by over 7%

nationwide.

3. According to PropTiger.com, the demand for affordable housing has increased, with

homes priced under INR 45 lakhs ($60,000) accounting for 47% of the total sales in the

financial year 2021.

4. According to Indian Express, RBI’s HPI recorded a 2.79% growth to 302 in the third

quarter as compared to 293.8 when it showed a 3.1% growth a year ago despite the rise in

interest rates.

5. According to Bank Bazar, as of 2021, the average mortgage interest rate in India ranged

from 6.65% to 7.25% depending on the lender and the type of loan.

6. According to a report by PropTiger.com, the average time taken to sell a property in the

top 9 cities in India was around 10-12 months in 2020, with the highest being in Mumbai

at 16 months and the lowest being in Hyderabad at 6 months.

7. According to Macrotrends, the net migration for India was -0.356 per 1000 population, a

3.52% decline from 2020

8. According to Emerald.com, the percentage of Indian REITs in a portfolio goes from 9%

at the smallest risk level to 19% at the maximum risk level. This shows that including

Indian REITs in a diversified portfolio of assets is an effective way to spread out the risk.
Investing is Housing Market in India 31

Tables

Table 1: HPI for Selected Cities

Source: NHB Residex

Table 2: Performance of Various Investment Instruments in India (Returns in %)

Year Stock Nifty 50 Bonds Real Estate Fixed

Deposit

2013 8.9 6.86 8.2 7.66 8.61

2014 29.89 31.39 9.54 4.69 8.31
2015 -5.03 -4.11 7.91 3.03 7.81
2016 1.94 3.01 7.94 5.32 7.15
2017 27.91 28.65 6.65 6.89 6.2
2018 6.41 3.16 6.9 4.35 6.77
2019 14.38 12.97 10.33 2.85 6.84
2020 -15.47 -7.45 5.27 1.55 5.49
2021 24.17 17.88 4.85 4.05 4.9
2022 19.06 16.56 4.98 5.36 4.69

Source: BSE Sensex, FIMMDA-NSE MIBOR Index, NHB Residex

Investing is Housing Market in India 32

Graphs

Graph 1: Bar Graph Showing the Change in Sales Volume of Housing Units

Housing units (in 1,000s)

350 329.24

300 279.82
267.96
244.69 242.33 245.86 232.9
250 228.07
215
200
154.43
150

100

50

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: Statista

Graph 2: Line Graph Representing the Rise in HPI

200
HPI of selected cities
180
160
140
120
100
80
60
40
20
0
Mar- JUN SEP- DEC Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec-
- -- - - 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022
2018 2018 2018 2018

Ahmedabad Bengaluru Chennai

Hyderabad Kolkata Mumbai
Investing is Housing Market in India 33

Source: NHB Residex

Graph 3: Housing Affordability Index of Selected Cities

HAI
Mumbai
Delhi
Chennai
Pune
Bengaluru
Hyderabad
Jaipur
Kolkata
Ahemdabad
Surat

0 10 20 30 40 50 60 70 80

Source: Business-Standard

Note: Higher HAI indicates greater affordability

Graph 4: Average Mortgage Interest Rates in India

Average Mortgage Interest Rates

12.00%
10.30% 10.15%
9.80% 9.50%
10.00%
8.65% 8.80%
8.35%
8.00% 7.15% 7.25%

6.00%

4.00%

2.00%

0.00%
2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: BankBazaar
Investing is Housing Market in India 34

Graph 5: Average Days on Market of Selected Cities

16
Time taken(in months)
14
13.5 13.5
12

10 11
10.5 10.5 10.5
10
8

0
Mumbai Delhi-NCR Bangalore Chennai Hyderabad Pune Kolkata

Source: Business Today

Graph 6: Net Migration of People in India

Net Migration(in thousands)

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
-50

-100
-142
-150 -158

-200

-250 -266 -266 -271

-282 -280 -285 -288
-296
-300

-350

Source: United Nations Department of Economic and Social Affairs

Investing is Housing Market in India 35

Graph 7: Inter State Migration in India

Source: Economic Survey of India

Investing is Housing Market in India 36

Graph 8: Comparison of Different Investment Instruments

Peformance of Investment Instruments

40 %

30 %

20 %

10 %

0%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

-10 %

-20 %

Stock Nifty 50 Bonds Real Estate Fixed Deposit

S

ource: BSE Sensex, FIMMDA-NSE MIBOR Index, NHB Residex