The latest Housing Sentiment Index (IIMB-MB HSI) by IIM Bangalore and Magicbricks forecasts that homebuyers across 9 of the 10 cities surveyed expect real estate prices to rise over the next six months. The aggregate Housing Sentiment Index (HSI) measured across 10 cities rose by 9% over the previous quarter and stood at 118. (An HSI score of 100 suggests prices are expected to remain static). The IIMB-MB buyer sentiment survey includes Ahmedabad, Bangalore, Chennai, Delhi, Gurgaon, Hyderabad, Kolkata, Mumbai, Noida and Pune.
Introducing The IIMB-MB HSI Report, Ms. Jayashree Kurup, Research and Content Head, Magicbricks.com, explained, “In line with the positive market sentiments, real estate buyers are upbeat about residential property. Most of the early seekers are end users, largely with a family income of upto Rs 10 lakh. While end users are actively scouring the market for property, the actual purchase decision may still be about 9 months away, marginally higher than the previous quarter. It is interesting to also note that premium buyers with an annual family income of Rs. 1 crore and above have posted significantly higher sentiment up by 13% over the previous quarter.”
Hyderabad posted an HSI of 118, an increase of 22% as compared to the previous quarter. Sentiment has improved considerably after the division of the state. Specifically, Central Hyderabad witnessed a 54% increase in HSI this quarter.
Bangalore topped the list of cities once again with an HSI of 143, a marginal 2% increase from the previous quarter. Consistent demand from IT and manufacturing sectors, increasing job security coupled with Bangalore being the preferred destination for job seekers has ensured that the city remains at the top of the list.
Ahmedabad was the only city with negative sentiment of 86, a drop of 13% from the previous quarter.
The Seller Sentiment Survey indicates that sellers continue to be bullish about markets with an HSI of 161. Of the sellers, 35% are doing so to book profits while 29% want a bigger accommodation. Of the respondents 60% of sellers are looking to sell apartments/flats.
Key Findings of the Apr-Jun 2014 Report
> The National HSI increased by 9% to 118 this quarter
>Bangalore, with an HSI of 143, continues to lead among the ten cities
>Hyderabad witnessed a 22% increase in HSI after the division of the state
>The Seller Index witnessed a marginal decline to post an HSI of 161
Summarizing the findings, Uma Sitaraman, Lead Researcher, IIMB-Century Real Estate Research Initiative (CRERI) stated, “Most cities witnessed a marginal increase in sentiment and this ‘guarded optimism’ is in line with the new government stepping in at the centre with a clear majority during the quarter. People seem to be waiting to understand the effects of this new government before taking any major decisions. With the stellar performance of the equity markets, real estate is bound to witness healthy demand in the near future due to re-allocation of profits from equities into housing.”
Properties in the Rs 20-40 lakh range continue to be preferred with over 29% buyers in this range. Apartments are the preferred housing type with over 65% choosing to buy apartments.