The Housing Sentiment Index (HSI), an Indian Institute of Management, Bangalore (IIM-B) and Magic Bricks initiative, will be expanded to cover more cities in the country early next year, said Venkatesh Panchapagesan, chief faculty coordinator of the programme launched by the IIM-B-Century Real Estate Research Initiative.
The HSI now covers the cities of Chennai, Delhi, Bangalore, Noida, Gurgaon, Hyderabad, Mumbai, Pune, Kolkata, and Ahmadabad, and is based on online surveys of prospective home-buyers. The survey results are released every quarter.
A posting on the HSI on its website said that the response to the initiative had encouraged the inclusion of additional cities. “The increased interest in real estate sector is evident in the launch of some very innovative indexes recently, the case in point being the Housing Startup Index launched by the Reserve Bank of India and the Ministry of Housing and Urban Poverty Alleviation...”
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Results for the July-September quarter 2014 says that home-buyers expect real estate prices to increase over the next six months in the 10 cities covered by the survey. However, the optimism has been reduced as “the percentage of buyers expecting price increase has fallen in eight out of the 10 cities compared to the previous quarter,” the survey results say.
The result indicates that the optimism that prevailed in the days immediately after the general elections has not held up.
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The survey notes that while the general economic scenario has improved, the residential property market is marked by rising costs on account of higher cost of construction and the higher cost of registration in some States. These factors have “further increased the hesitancy of consumers to take the plunge and invest in housing”.
The survey notes that despite an optimistic economic outlook, substantial unsold inventory and high borrowing rates have “dampened the real estate markets.”
It also says that with prices ruling high, the prospects of providing “affordable housing for the masses remains a distant dream.”
The results say that the quarter under review is marked by a fall in the BSE Realty Index. The index comprising major players in the realty sector performed poorly during the period, finishing 20 per cent down from the previous quarter.
Other developments in the sector include a Union government move to introduce Real Estate Investment Trusts during the period under review.