NEW DELHI: Consumer sentiment about buying a new home is currently the strongest in four years, according to ZyFin Research's New Home Purchase Sentiment Index.
The research firm says that declining borrowing costs, improving employment outlook and higher availability of affordable housing projects are encouraging prospective home buyers to purchase a new home in 2015.
"Regulatory changes like recent Cabinet approval to the Real Estate Bill (Regulation and Development) are expected to boost home buyers' sentiment further," it said.
According to respondents, mostly middle-class urban Indian consumers, who were polled by ZyFin Research, buying a home is gradually becoming more conducive compared to a year back. "A large section of consumers polled felt they expect borrowing costs to decline further making it easier to avail home loans," ZyFin Research said.
Capturing the improvement in sentiment, ZyFin Research's New Home Purchase Sentiment Index, stood at its highest level since inception in October 2011 in June 2015 at 43.9 in June 2015. It was at 30.7 in June 2014. The index is based on a monthly poll of 3,000 consumers in 11 cities of different sizes across India.
"Boosting aggregate demand remains the key to help an economy out of a slowdown. The recent steps taken by lending agencies to curtail lending rates taking a cue from RBI's interest rate outlook would go a long way in convincing consumers to start opening their purse strings and help generate demand for new homes. Protection of consumer interests, promotion of fair play in real estate transactions and ensuring timely execution of projects have been some of the long pending demands of Indian home buyers," said Debopam Chaudhuri, chief economist at ZyFin Research.
In June 2015, the index level was the highest in South India at 48.9 while West India had the lowest level of 40.5. Among cities, Hyderabad had the highest index level of 74.3 while Ahmedabad ranked the lowest with an index level of 11.1.