Magicbricks & IIM (Bangalore) release
India’s first robust “Housing Sentiment Index” for the Real Estate Sector
Global
academic leaders, Indian Institute of Management Bangalore (IIMB) and
India’s leading property portal,
Magicbricks.com (MB) collaborate and release the first robust “IIMB-MB Housing
Sentiment Index” (HSI) for the real estate sector in India.
The IIMB MB HSI is a sentiment index of the
Indian real estate market that captures buyer ‘mood’ and serves as a leading
indicator of residential real estate market performance. The first inaugural report has now been
released by comparing survey results in the month of September 2013 against
Index scores captured earlier in July 2013.
According
to the report, in line with the current economic scenario, buyers across cities
are bullish enough to slow down real estate purchases, but are actively
scouting for property. However, they are not in a hurry to make their purchase
and expect the prices to drop by upto 10%. Buyers are willing to wait for
3months to a year to conclude property purchases.
Sudhir
Pai, Business Head of Magicbricks said, “Magicbricks has
been publishing its popular market performance report, PropIndex, for the last
2 years. While PropIndex reports on real estate market performance of the
previous quarter, we had sensed the need to capture “buyer sentiment” which
could in turn offer insights into potential future market performance. We are
delighted to partner with such a credible research-driven institute as IIMB in
bringing out India’s first Housing Sentiment Index”.
 |
| Sudhir Pai, Business Head, Magicbricks |
The
HSI currently covers the 8 cities of Mumbai, Delhi, Hyderabad, Pune, Noida,
Gurgaon, Bangalore & Chennai.
An
HSI of 100 suggests that buyers expect prices to remain at current levels,
while values lower than 100 suggest that buyers expect prices to fall and
higher than 100 that they expect them to rise.
Key
Findings of the 1st Report..
>
In line with the overall economic sentiment, the National HSI dropped to 93
from 117 in the previous quarter, a decline of over 20%.
>
Buyers in Bangalore expect prices to increase marginally with an HIS of 106,
while buyers in the other 7 major cities expect them to fall with HSI scores
below 100.
>The
percentage of buyers who expect prices to fall by more than 10 % has almost
doubled from 14 % of our sample last quarter to 25 % this quarter.
>
Mumbai has the lowest HSIscore of 81, which shows that they are pessimistic
about future price increases.
>
Buyer sentiment dropped the steepest at 34 % in Hyderabad, not surprising given
the uncertainty around the Telengana issue.
Summarizing
the findings, Prof. Venkatesh Panchapagesan, Head of IIMB-CRERI, IIM
Bangalore stated,"Home buyers' sentiment continue to remain weak
across major cities as many expect house prices to further decrease this
quarter. While price expectations were universally down this quarter when
compared with last quarter, the drop was most severe in Hyderabad and least
severe in Bangalore. Buyers seem to
prefer a "wait and watch" strategy that could force developers' hands
to cut prices more aggressively to reduce inventory during the festive
season."
Buyers
now are willing to wait, with almost a third of the respondents willing to wait
more than a year before buying a property. At the micro level it appears that
the rising inflation rates and high borrowing costs are making homebuyers
reassess their big-ticket purchase decisions. Coupled with the macros of
sluggish economic growth and the looming political election’s uncertainties,
buyers are at present extremely cautious.
The
Inaugural Issue is available complimentary for download here – www.magicbricks.com/iimb-hsi
IIMB
MB HSI Indexation Methodology ,,
The
IIMB MB HSI index is based on the “Diffusion Index” methodology that is widely
used to capture market sentiments globally. HSI is calculated by taking the
difference of total positive and negative sentiments after adjusting for the
magnitude of neutral responses and other biases inherent in survey based work.
The
value of HSI can range from 0 to 200. A score of 100 represents neutrality,
meaning people don’t expect house prices to either increase or decrease. A
score of 200 indicates that all respondents expect house prices to increase. A
score of 0 indicates that all respondents expect house prices to decrease.
This
index is based on an online survey ofprospective homebuyers after careful
screening by MB and IIMB.
The
survey questionnaire has been designed to accurately capture buyer sentiment on
house prices, the degree to which he/she thinks house prices will move, micro
market preferences within each city and basic demographic information including
buyer preferences for type of property and financing methods.
About
IIMB-CRERI..
IIMBangalore-
Century Real Estate Research Initiative (IIMB-CRERI) is a dedicated research
initiative to pursue scientific research on Indian real estate industry. It
partners with industry/government organizations to collect data and develop
research projects that are aimed to improve understanding of this vital sector
of the economy. The initiative complements work at IIMB's other leading Centres
such as the Centre for Public Policy. As a leading international management
school in India, IIMB has strong linkages to the corporate sector, CSOs and the
government, and its rigorous research projects are defined by structured
analytical processes and constant engagement with market participants.
About
Magicbricks.com:..
Magicbricks.com
is India's No 1 Property portal. With monthly traffic exceeding 6 Million
visits and with an active base of over 5Lac property listings, Magicbricks
provides the biggest platform for buyers and sellers of property to connect
with each other in a clear, transparent manner. Our vision is to be a 1-stop
shop for property buyers and sellers; and with this in mind, we have innovated
on launching several product features, content and research services and in
building of the largest audience pool. We are part of the Times of India Group,
India's biggest Media Conglomerate.
For More Details
Mr.
Aseem Seth
Head
of Corporate Communications
CEO
Corporate Office
Times
Business Solutions Limited
+91
120 663 6338
+91
99102 73367
aseem.seth@timesgroup.com
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