Real estate and housing market in Hyderabad shows signs of being in trouble waters as there is a subdued sentiment among home buyers in the city. The trend gathered pace after the general elections and has been the same story thereafter. It has drastically dropped by a margin of 25 percent post the general elections held last year.
The Housing Sentiment Index Report or briefly HSI report of the fiscal period January-March 2015 clearly indicates this. The survey was conducted by expert two expert organizations-IIM Bangalore and Magic bricks. The HSI survey indicates the sentiment of prospective home buyers. The seller survey indicates the seller’s interests or preferences from the previous quarter.
The latest edition of this survey reveals that there is a steady decline by 25 percent and the HSI at present is 89.
Home buyer’s sentiment is determined with respect to the HSI. Basically an HSI of 100 is taken as a reference point. When above 100, it means that there is a consensus amongst the general public that home prices will go up. If it lies below the 100 mark, there is an expectancy of home prices to fall down. Therefore, the present HSI of 89 clearly reveals that people of Hyderabad are in no mood to buy homes or property as they expect the prices to go down. Thus quite naturally there is an increase in the number of unsold homes and properties around the city.
What about the active buyers?
Active age groups (30-39 and 40-49) or the age group which records as the maximum buyers of homes are also pessimistic about the market. They too have no confidence about home prices going up soon. This age groups formed a large share of the respondents of the survey conducted (about 50%) and the HSI of this two age groups are 85 and 81 respectively.
Besides these active groups almost 70 percent of the respondents were found to live in rented accommodations. They recorded even lower HSI than the ones who are residing with their parents in their ancestral establishments. Hence, it can be easily conferred that prospective home buyers do not intend to buy new establishments, unless the prices are corrected.
Is it the desirable time for business with the property?
An important outcome of the survey also revealed that about 65% people are looking for a property. However none of them are seeking it for an investment. They want it for residential purpose.
The low confidence of buyers and such prices hints at one common thing-this is not the ideal time for a property sell.
Most of the respondents, almost about 31%, were interested in properties in the range of Rs20-40 lakhs. This trend has faced a steady decline as the percentage fell by 3% and is 28% now-a record low HSI. Around 17% of the respondents were seeking property below Rs20 lakh.
South Hyderabad had been that part of the city always preferred by prospective buyers. Here, a steep decline is indicated with the percentage falling by 34%. This is indeed a matter of concern and real estate experts must find out some ways to make gate away from this scenario.
The low index and poor confidence in the market establishes a negative phase amongst developers or sellers. Needless to say, every seller wants to have a prospective buyer of his property. However, with such indexes and prices not going up it is never a good sign. Those in search of a prospective buyer need to wait for long as the scenario changes and there is a turn of table. Unless there is an indication of the home prices going up significantly, selling property is not desirable.