In the quarter ending June 2014, which recorded slow sales, the July – September 2014 quarter showed a different trend. The sales were surely down but the enquiries came in bulk which made the market watchers to think that this is probably a positive indication. They thought the buyers’ assurance over the market has dwindled and that is why the home buyers and investors are in a wait and watch mode. From this scenario few experts noted that a few trigger in the market conditions can boost sales and can help the buyer’s assessment of affordability to increase. The trigger could be an interest rate cut or few noted healthy signs in the economy. But with the new government in place showing clear signs of putting the Indian economy back on track, the government passing Union budget and higher salaries in IT and ITeS sector, is there any improvement of the buyer’s sentiments? Is there really a revival in the market? Well, the realty firms have noted that in the last month, in few cities the time between enquiry and sales have diminished showing buyer’s eagerness of buying real estate property. This seemed to be a healthy sign. But the question still remains whether after the lull of two years in the real estate market, is the market showing signs of revival? Will it again go back to its glory?
The reality in the last two quarter in most of the cities was bleak with piles of unsold inventory being loaded with slow sales. The launches also slowed down. In cities like Pune, the sales were slow; the unsold stock high with high interest rates but there was no reduction of prices.
A recent survey by IIM Bangalore and MB HIS (Housing Sentiment Index) throws new insight in to the buyer’s sentiments and what really the buyer has in mind. The survey found out that for the 2nd quarter of 2014-15, the buyers of homes expect property prices to rise across the country. The measurement of Housing Sentiment Index in 10 cities dropped by 4 percent this quarter ending September 2014 to 114. A score of 100 means that the prices will remain the same. The survey conducted was in cities like Bangalore, Ahmedabad, Chennai, Delhi, Hyderabad, Gurgaon, Kolkata, Noida, Pune and Mumbai.
Let us examine the city wise situation and the buyer’s sentiments in each city
The buyer’s sentiments in Ahmedabad rose by 30 percent which the experts attribute for the government policies and the start of new industries. The buyer’s sentiments in Bangalore, on the other hand dropped by 13 percent to a score of 124. Experts think that shortage of affordable housing and rising prices may be the reason. Pune registered a high Buyer’s sentiment with a rise of 5 percent to 131 which made Pune the highest sentiment scorer. Social and physical infrastructure development may be making Pune a preferred residential location. Hyderabad showed a drop of HSI by 12 percent compared to the previous quarter with the scores coming to 104. The national HSI came down by 4 percent.
Summarizing the results of the survey the lead researchers and the experts opined that the buyers are still in a wait and watch mode and are waiting for the market to become more stable. They also opine that with more effective policies in the real estate sector and with expectation of the economy to perform better, the buyer’s sentiments are sure to improve which would be reflected in the sales figures.
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