An analysis of housing market and prices in India

Abstract

The Real Estate sector in India is experiencing a lot of activity in the recent few years. With a number of policy changes like RERA and GST coming into place, the real estate market has also gone under a cycle of fluctuations. We have tried to map these fluctuations in the Housing Market in the Indian Real Estate Sector. We gathered data on ten variables which, given macroeconomic theories, we assumed would be significantly impacting the Housing Price Index (developed quarterly by NHB). Our model reveals that Real GDP per Capita most consistently displays a positive and significant relationship with HPI. Population is seen to have only limited significance and IIP is also limited in its explanatory power. Momentum, as described through population growth rate, is however seen to have a meaningful impact as does CPI. Our model attempts to address these relationships contemporaneously, but it is not able to distill supply and demand effects completely