Real estate boom in Hyderabad
There is a positive sentiment among the Hyderabadis in buying new house. As per the latest housing sentiment index (HSI) released as part of an IIM Bangalore – Magicbricks Survey, the city’s HSI rose by 21 per cent during the last quarter of 2013 when compared to a steep decline of 34 per cent in the previous quarter (HSI 101). The survey shows respondents in East and North Hyderabad are optimistic while those in Central and South Hyderabad are pessimistic. In terms of the sentiment by buyer age group- about 18 to 24 year olds who comprise only 3 per cent of the population are the most optimistic while 50 year and above who comprise 12.5 per cent are pessimistic.
About 53 per cent cite financial reasons as buyer constraints while the rest cite market conditions for their property purchase decisions. Of the surveyed, 46 per cent want to purchase property within the next six months while 28 per cent are ready to wait a year or more. Among the respondents, HSI for those who are planning to buy property as an investment is 35 per cent. And 46 per cent prefer flats followed by 34 per cent who prefer villas. The survey also shows 28 per cent of those who already live in their own house are looking to buy while 59 per cent of respondents currently live in rented accommodation. About 12 per cent live with parents or relatives. Of the surveyed, 49 per cent of buyers are looking at properties that are less than `20 to 40 lakh range while 19 per cent are looking to buy property within `40 to 60 lakh range. Properties below `20 lakh comprise 12 per cent of total respondents.
Not just Hyderabad, Indian real estate is bound to remain an attractive sector in the medium term with faster growth expected in Tier II cities. Competitively priced urban pockets in the country where robust supply is backed with a promise of even better infrastructure have received a boost from end users. However, active interest may take another 6-9 months to translate into buying activity as consumers expect prices to go up only after six months, post the 2014 elections, says Sudhir Pai, business head, Magicbricks. The sentiments were muted by Mumbai, which ended last this quarter too. As the financial capital wrestles with a state of high supply with negligent demand, it is predicted that it will take nine quarters to clear this inventory at current rates.
The latest IIMB MB HSI Report also introduces the seller survey to compare sentiments between sellers and buyers. The HSI for sellers was a lot higher than the buyer HSI. 29 per cent of sellers expected a 5 per cent-10 per cent increase in property prices. Whereas 38 per cent want to book profits while 30 per cent want to move to a bigger accommodation.Venkatesh Panchapagesan, head of IIMB-CRERI, IIM Bangalore stated, “Although sentiment this quarter has increased, buyers continue to be cautious with average waiting time increasing to over nine months. Bangalore continues to be steadily upbeat over the last 3 quarters and is the first choice for those relocating from other cities. Buyers “wait and watch’ approach is most likely to continue in the first half of 2014.”
Properties in the `20 lakh-40 lakh range are most preferred with over 30 per cent of buyers in this range nationally. Given the high construction costs, steady inflation, increasing bank loan rates and the looming elections, buyers are likely to use extreme caution before investing in property in the coming months.
Source from: Metro India