Housing Sentiment IndexAn IIMB Magicbricks Initiative

Ahmedabad I Bengaluru I Chennai I Delhi I Gurgaon I Hyderabad I Kolkata I Mumbai I Noida I Pune

Special Post Budget 2015 Housing Sentiment Survey

n Post Budget 2015 sentiment fell by 29% to HSI 84 compared to the post-election survey of May 2014. Sentiments are falling steadily post elections

n 9 out of the 10 cities surveyed posted over 20% reduction in sentiment with Ahmedabad witnessing a 14% correction

n A majority of those who expect prices to increase expect only a 0-5% increase

n Majority of those who expect a price correction expect a 10%-15% correction in home prices

n Seller sentiment is still in the positive with HSI at 146 (9% reduction since elections)

n Buyer Sentiment fell from 118 in May 2014 to 84 immediately after Budget 2015

The value of HSI can range from 0 to 200. A score of 100 represents neutrality, meaning people don’t expect house prices to either increase or decrease. A score of 200 indicates that all respondents expect house prices to increase. A score of 0 indicates that all respondents expect house prices to decrease. The index is based on the “Diffusion Index” methodology that is widely used to capture market sentiments globally. HSI is calculated by taking the difference of total positive and negative sentiments after adjusting for the magnitude of neutral responses and other biases inherent in survey based work.

[ SENTIMENT SNAPSHOT ]1

HOUSING SENTIMENT INDEXAn IIMB Magicbricks Initiative

n Rs 20-40 lakh is the most preferred price range with 26% respondents looking for houses in this price range (HSI 90)

n There was a 30% reduction in sentiment compared to the post election sentiment for buyers within this price bracket

n The biggest drop of 35% in sentiments was observed in the Rs 1-2 crore segment

Sentiments by Price 150

120

90

60

30

0

Home Buyer Sentiment Index

118

84General

Elections May 2014

Post 2015 NDA Budget

30 60 90 120 150

Ahmedabad

Bengaluru

Chennai

Delhi

Gurgaon

Hyderabad

Kolkata

Mumbai

Noida

Pune

8674

143100

12488

11983

12074

11889

133

10785

13288

125

0

Rs 40-60 lakh

Rs 60 lakh- 1 cr

Rs 1 cr - 2cr

Rs 2cr - 5cr

Rs 20-40 lakh

< 20 lakh

Barring Bengaluru, all other cities recorded negative sentiment (<100)

General Elections May 2014 Post NDA 2015 Budget

General Elections May 2014 Post NDA 2015 Budget

123.1

129.1

119.3

118.5

119.2

100

118.5

100

95

96.0

90.0

85.0

77.0

84.0

98

81.0

n Over 65% respondents prefer flats (HSI 88) while 13% prefer to invest in land (HSI 92)

n Sentiment for land buyers and multi-storey apartments dipped by almost 27% since elections last year while sentiment for villa buyers dipped by 29%

Sentiments by Home Type2

[ SENTIMENT BY TIME HORIZON ]

n Over 50% want to buy property within the next six months as compared to the 44% immediately after elections. Coupled with drop in sentiment (HSI 88) for this segment, it shows more people perceive that prices are likely to decrease and wish to benefit from such developments

n Nearly 50% respondents are waiting for prices to drop (HSI 65) while only 11% are waiting for interest rates to come down (HSI 92). This posts a question mark on the role which decrease in home loan rates can play in improving the fortunes of the reality sector

Sentiments by Time

n While there is an overall drop in sentiment for each category, those attributing home purchase to financial constraints are more optimistic than those attributing it to either high interest rates or inflated prices

n Analysis of the last few quarters shows that the former segment has been on an average 15% more optimistic than the latter

Sentiments by Constriant

Flat/Multi-storey Apartments

Land/Site

Villas- Independent

Houses

121

88

126

92

126

89

0 30 60 90 120 150

150

120

90

60

30

0 6 months- 1 year

> 1 Year < 6 Months

121 119125

87 91 88

General Elections May 2014 Post NDA 2015 Budget

0 30 60 90 120 150

Personal Financial Situation

Market Reason (Price-Interest

Rate etc.)

General Elections May 2014 Post NDA 2015 Budget

General Elections May 2014 Post NDA 2015 Budget

HOUSING SENTIMENT INDEXAn IIMB Magicbricks Initiative

100

100

100

132

110

108

96

Housing Sentiment IndexThe Housing Sentiment Index (HSI) is jointly developed by IIM-Bangalore & Magicbricks. The index is based on an online survey of prospective home

buyers after careful screening by Magicbricks (magicbricks.com) and IIM-B. A seller survey was also launched across the nation to track buyer and seller preferences and sentiments. Results of both surveys are documented in this

report. Every quarter we closely monitor survey responses to ensure data credibility is high. We also plan to verify the online survey data collected with samples collected from property shows across cities periodically to ensure the

convenient sample data collected is representative of the true population.

About IIMB CRERIIndian Institute of Management Bangalore-Century Real Estate Research Initiative (IIMB-CRERI) http://www.iimb.ernet.in/initiatives/iimb-creri/ is a

dedicated research initiative to pursue scientific research on Indian real estate industry. We partner with industry/government organisations to collect data and develop research projects that are aimed to improve understanding of this vital sector of the economy. The initiative complements work at IIMB’s

other leading centres such as the Centre for Public Policy. As a leading international management school in India, IIM-B has strong linkages to the

corporate sector, CSOs and the government. Its rigorous research projects are defined by structured analytical processes and constant engagement with

market participants.