NEW DELHI: Even though the Indian real estate market continues to see robust demand for properties - particularly in the affordable range -- homebuyers expect the real estate prices to drop in the near term.
This has been revealed in a just-released buyer sentiment survey carried out jointly by IIM Bangalore and Magicbricks in the cities of Ahmedabad, Bengaluru, Chennai, Delhi, Gurgaon, Hyderabad, Kolkata, Mumbai, Noida and Pune.
Based on the survey, the Housing Sentiment Index ( IIMB-Magicbricks HSI) forecasts that the homebuyers expect real estate prices to drop over the next six months. In fact, the aggregate Housing Sentiment Index (HSI), measured across the 10 cities, dropped sharply by 29% in the 3rd quarter of 2014-15 to 81. (An HSI score of 100 suggests the prices would remain static).
According to the survey, all the 10 cities witnessed a sharp drop in sentiments, with 8 out of 10 posting over 10% drop in sentiment. Ahmedabad, Delhi and Gurgaon witnessed over 25% correction in sentiments compared to the previous quarter. High inventory levels, soaring prices and circle/guidance rate increases were some of the compelling reasons for consumers' pessimism.
"Over the past three quarters, housing market sentiment has swung from extreme euphoria after the general elections to sharp corrections that reflect the actual reality on ground," reveals the survey. However, "while there is an overall drop in consumer sentiments, the Indian real estate market continues to see robust demand for properties in the affordable range of Rs 20-40 lakh from end-users. Ease in minimum capital investment and reduction in minimum built area of projects to procure FDI are likely to address demand and keep the real estate market attractive in the medium to long-term," explained Sudhir Pai, Business Head, Magicbricks, while talking about their survey.