Graphic: Naveen Kumar Saini/Mint

Why then do we have the feeling that Mumbai real estate is too pricey? The answer may lie in the fact that the RBI index moved up beyond 150 only in the third quarter of 2007. So it moved up 50 points in four years and more than 100 points in the next two years—that’s the reason for the perception of prices having gone up too much. But as RBI’s data show, the number of transactions has been going up sharply since the second quarter of 2009.

But perhaps the rise in housing prices should be compared, not with GDP, but with equity market performance. The RBI report says: “There has been a general upward pressure on housing prices in the recent period, which broadly co-terminates with the rise in stock prices." Or, of course, there could be something wrong with the index.

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