India has become the seventh country in the world to release a Housing Start Up Index (HUSI), recording the number of housing starts, and measuring the sector’s impact on the economy.
The index has come up with interesting trends. Housing construction has declined between 2009 and 2011 in big cities like Kolkata, Chennai and Bangalore, but grown in small cities Dehradun, Bhopal and Hubli.
Clearly India's property boom followed a classic pattern - starting in the bigger cities, then spreading to smaller towns.
The HUSI is a major step forward in bring transparency and predictability to India's vast housing sector, which contributes 10% to India's gross domestic product (GDP), and employs, directly or indirectly, 30 million people. The HUSI is useful as a leading economic indicator, and a major tool for industries to plan and strategize, including steel, cement, construction, labour and home appliances.
Canada, USA, Japan, France, Australia and New Zealand are the other six countries which release a HUSI on a regular basis to evaluate the trends in the housing sector, and analyze its impact on sectors like banking, mortgage and infrastructure and construction industries.
The first HUSI in India, released on February 3 by the Ministry of Housing and Urban Poverty Alleviation, and the Reserve Bank of India (RBI), records house starts in a total of 27 cities between 2009 and 2011. The number of cities will go up to 300 in coming years. The RBI set up the Technical Advisory Group which developed the HUSI in 2007.
“These indicators help policy makers and administrators understand the future focus and thrust areas in terms of not only housing provision, but also all the associated infrastructure and civic amenities,” said Housing and Poverty Alleviation Minister Girija Vyas.