In a recent survey by the Indian Institute of Management Bangalore and property portal Magicbricks, which revealed that Housing Sentiment Index (HSI) dropped by 20% in the third quarter (July-Sept) of the year 2013 against the last quarter and where buyers expressed that they are ready to wait to buy property until the housing prices reduce and which they expect to happen in next six months.
The Housing Sentiment Index (HSI) report is based on the online survey of prospective home buyers across the eight major cities of the country, which includes Bangalore, Chennai, Hyderabad, Delhi, Noida, Gurgaon, Mumbai, and Pune.
During the survey most of the home buyers across the nation also expressed their opinion that they expect fall in real estate prices over the next six months. The Housing Sentiment Index (HSI) report by IIMB and Magicbricks also showed that the cumulative Housing Sentiment Index (HSI) dropped to 93 from 117 of the previous quarter of 2013, which is a fall of over 20% when compared to the previous quarter of 2013.
How the Housing Sentiment Index (HSI) is calculated?
Generally, an HSI of 100 is considered as neutral, which indicates that buyers who took the survey expect the housing prices to remain at current levels in the market, while values lower than 100 signifies that the buyers anticipate the fall of prices, whereas the value greater than 100 shows that the buyers who have taken the poll expect the prices to move high. A comprehensive score of 93 in the Housing Sentiment Index (HSI) that was surveyed across the 8 major cities shows the buyers expectation in the fall of housing price in the next 6 months, which also indicates a sway in the sentiment among prospective home buyers.
The report also added that except in Bangalore, where buyers anticipated prices to increase slightly that lead the an HSI score of 106, while in other 7 major cities buyers opined in fall of housing prices and Mumbai being the lowest with an HSI score of 81.
The survey also revealed that the percentage of buyers who look forward to fall in prices by 10 per cent or more has almost doubled and was around 25 per cent in this quarter of 2013 against the 14 per cent of last quarter of 2013.
The report also said, most of the buyers are ready to wait and watch for 6 months to a year for the fall in housing prices and then to invest money in the housing sector of the real estate market.
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