The Housing Sentiment Index (IIMB MB HSI) assessed by IIM Bangalore and Magicbricks has given a forecast as homebuyers across the nation expect real estate prices to rise over the next 6 months.
The aggregate Housing Sentiment Index (HSI) measured over the holiday season, has bounced back to 117 (the level at which it was in Q1) from 93 in the previous quarter.This reflects a shift from the previous quarter when buyers expected a decrease in prices. (An HSI score of 100 suggests the prices would remain static.)
“Indian real estate is bound to remain an attractive sector in the medium term with faster growth expected in Tier II cities. Competitively priced urban pockets such as Noida, where robust supply is backed with a promise of even better infrastructure have received a thumbs up from end users. However, active interest will take another 6-9 months to translate into buying activity as consumers expect prices to go up only after six months, post the 2014 elections,” says Sudhir Pai, Business Head, Magicbricks.
This quarter, the IIMB MB HSI buyer survey extends to two more cities, Ahmedabad and Kolkata, apart from covering Mumbai, Delhi, Hyderabad, Pune, Noida, Gurgaon, Bangalore and Chennai.
Noida topped the list of cities with an HSI of 129 witnessing a 33% jump in HSI Q/Q. The proposed metro link, emphasis on affordable housing projects and construction of software technology parks is making Noida a fast growing and attractive city to live in.
The sentiments were muted by Mumbai, which ended last this quarter too with an HSI of 85. As the financial capital wrestles with a state of high supply with negligent demand, it is predicted that it will take 9 quarters to clear this inventory at current rates.
The Latest IIMB MB HSI Report also introduces the Seller survey to compare sentiments between sellers and buyers. The HSI of 156 for sellers was a lot higher than the buyer HSI. 29% of sellers expected a 5%-10% increase in property prices. 38% want to book profits while 30% want to move to a bigger accommodation.
Key Findings of the Q3 2013 Report
The aggregate Housing Sentiment Index (HSI) measured over the holiday season, has bounced back to 117 (the level at which it was in Q1) from 93 in the previous quarter.This reflects a shift from the previous quarter when buyers expected a decrease in prices. (An HSI score of 100 suggests the prices would remain static.)
“Indian real estate is bound to remain an attractive sector in the medium term with faster growth expected in Tier II cities. Competitively priced urban pockets such as Noida, where robust supply is backed with a promise of even better infrastructure have received a thumbs up from end users. However, active interest will take another 6-9 months to translate into buying activity as consumers expect prices to go up only after six months, post the 2014 elections,” says Sudhir Pai, Business Head, Magicbricks.
This quarter, the IIMB MB HSI buyer survey extends to two more cities, Ahmedabad and Kolkata, apart from covering Mumbai, Delhi, Hyderabad, Pune, Noida, Gurgaon, Bangalore and Chennai.
Noida topped the list of cities with an HSI of 129 witnessing a 33% jump in HSI Q/Q. The proposed metro link, emphasis on affordable housing projects and construction of software technology parks is making Noida a fast growing and attractive city to live in.
The sentiments were muted by Mumbai, which ended last this quarter too with an HSI of 85. As the financial capital wrestles with a state of high supply with negligent demand, it is predicted that it will take 9 quarters to clear this inventory at current rates.
The Latest IIMB MB HSI Report also introduces the Seller survey to compare sentiments between sellers and buyers. The HSI of 156 for sellers was a lot higher than the buyer HSI. 29% of sellers expected a 5%-10% increase in property prices. 38% want to book profits while 30% want to move to a bigger accommodation.
Key Findings of the Q3 2013 Report
- The National HSI bounced back to 117 from 93 in the previous quarter.
- Noida, with an HSI score of 129, posted an increase of 33% compared to the previous quarter.
- In spite of the Telengana issue, Hyderabad HSI increased by 22% to 101 this quarter,breaking a largely negative streak to end close to neutral
- This quarter too, Mumbai posted lowest HSI score of 85, followed by Delhi with an HSI of 96, the only two cities with HSI lower than 100.
- Not surprisingly, the seller index that was introduced this quarter is highly optimistic with an HSI of 156.
Prof. Venkatesh Panchapagesan, Head of IIMB-CRERI, IIM Bangalore stated, “Although sentiment this quarter has increased, buyers continue to be cautious with average waiting time increasing to over 9 months. Bangalore continues to be steadily upbeat over the last 3 quarters and is the first choice for those relocating from other cities.
Buyers “wait and watch’ approach is most likely to continue in the first half of 2014.”
Properties in the Rs. 20-40 lakh range are most preferred with over 30% of buyers in this range. Given the high construction costs, steady inflation, increasing bank loan rates and the looming elections, buyers are likely to use extreme caution before investing in property in the coming months.
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