Home buyers expect prices to fall in 6 months: Survey
   
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Home buyers expect prices to fall in 6 months: Survey

Last Updated: Tuesday, November 26, 2013, 19:54
 
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Home buyers expect prices to fall in 6 months: Survey
New Delhi: Home buyers expect prices to fall in the next 6 months as indicated by housing sentiment index that fell by 20 percent during July-September compared to the previous quarter, according to a survey by Indian Institute of Management Bangalore and property portal Magicbricks.

The Housing Sentiment Index (HSI), jointly developed by IIM-Bangalore & MagicBricks, is based on an online survey of prospective home buyers in eight major cities of India -- Delhi, Noida, Gurgaon, Mumbai, Chennai, Hyderabad, Pune and Bangalore.

"Home buyers across the nation expect real estate prices to fall over the next six months. The aggregate Housing Sentiment Index (HSI) dropped to 93 from 117 in the previous quarter, a decline of over 20 percent," IIMB and Magicbricks, which is part of Times of India Group, said in a statement.

A HSI of 100 suggests that buyers expect prices to remain at current levels, while values lower (greater) than 100 suggest that buyers expect prices to fall (rise).

"An aggregate HSI score of 93 for the 8 cities surveyed indicates expectation of a price fall over the next 6 months. The index fell from 117 last quarter, which indicates a shift in sentiment among prospective home buyers," it added.

Buyers in Bangalore still expect prices to marginally increase (HSI=106) while buyers in the other 7 major cities expect prices to fall, with Mumbai having the lowest HSI score of 81. The Telengana crisis seems to have hurt buyer sentiment in Hyderabad badly as its HSI score fell by over 30 percent to 83, the report said.

"The trend is strong in all the eight cities that were surveyed and reflects a shift from the previous quarter when buyers expected price rise to continue," the statement said.

The percentage of buyers who expect prices to fall by more than 10 percent has almost doubled from 14 percent of sample last quarter to 25 percent this quarter.

"Not surprisingly, more buyers are willing to wait, with almost a third of our sample willing to wait more than a year before buying a property. The expected waiting time has increased to 9 months, something that does not augur well for the inventory-heavy industry," the report said.



PTI

First Published: Tuesday, November 26, 2013, 19:49


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