Affordable Cities Record a Rise of 2-5% in City Indices During Oct-Dec 2013 Quarter – Reports the Magicbricks PropIndex

NEW DELHI, March 5, 2014 /PRNewswire/ --

While the National Property Index Remained Stable, the PropIndex Reports That Cities Such as Chennai, Ghaziabad and Pune Which Offer Relatively Affordable Properties Depicted the Highest Rise in City Index

The last quarter of 2013 was largely characterised by a cautious consumer approach and controlled supply by local and national developers that kept the index unchanged in contrast to the 4% rise that was recorded in the previous quarter.

The 11^th edition of PropIndex also reports that 23% of the demand was concentrated in affordable properties priced from Rs 30-50 lakh and an equally dramatic 20% of demand was for luxury housing worth over a crore. While supply in the affordable segment has inched up marginally across major cities such as Delhi, Gurgaon, Noida, Ghaziabad and Bangalore, it still lags behind the huge demand witnessed for the same. On the other hand, an over-supply was noted for high-end properties. What was interesting to note was that properties in the mid-segment priced at Rs 50-70 witnessed relatively subdued demand.

"The year 2013 has been a topsy-turvy ride for the housing sector. Sentiments have remained subdued in the recent months. However, our latest HSI report indicates early signs of a bump-up in the buyer sentiment. While it is still early days to conjecture whether this will translate into a strong buying cycle, the trend will nevertheless come as a welcome relief to the industry," states Sudhir Pai, Business Head, Magicbricks.com.

"During slow market when a consumer does a lot of activity in terms of searches and queries, it indicates a future positive sentiment. There has been immense activity at the affordable housing level and premium luxury housing. The Housing Sentiment Index (HSI) reflects this positive sentiment during the quarter. Taken together the PropIndex and Housing Sentiment Index give a credible assessment of the past quarter and insight into what can be expected in the next quarter," adds Jayashree Kurup, Head - Content & Research, Magicbricks.

The Magicbricks and IIM Bangalore Housing Sentiment Index (HSI) that was released last week reported that property buyers across the country are expecting real estate values to rise in the next six months. And the HSI had rebounded back to 117 as compared to 93 recorded in the previous quarter, evidencing that buyers are looking to buy before prices rise.

PropIndex also tracks real estate performance at the city level. Here are the highlights:

To begin with, Chennai recorded the highest rise (5%) in city index values amongst all the cities tracked. The city has been consistently recording a positive city index since the last three quarters. Ample supply in the demanded categories (Rs 20-60 lakh budget bracket) and relative affordability has worked in favour of the city.

Ghaziabad and Pune recorded the second highest rise in city index recording a movement of 2% in the Oct-Dec 2013 quarter. People were looking for properties in the range of Rs 20-60 lakh and ample supply in this category kept the Ghaziabad market robust.

Pune market was driven by the IT developments coupled with significant supply in the affordable range.

Delhi, Bangalore and Gurgaon, on the other hand, recorded a negative trend. Bangalore recorded the highest drop of 4% in city index while Delhi and Gurgaon noted a drop of 2% each.

Moderate growth in the IT sector during the last few months of the year and slow hiring in the same resulted in cautious buying. This coupled with excess inventory in the luxury segment led to falling prices in Bangalore. Delhi and Gurgaon were also not popular due to high capital values.

Noida in particular saw a revival of consumer sentiments with the index moving up by 1% as opposed to the 1% drop noted last quarter. This was also reflected in the HSI with the sentiment index for the sub-city rising by 33% against the drop of 20% noted in the Jul-Sep 2013 quarter.

Mumbai has probably been the slowest market. High property values and unsold inventory hampered the growth of the market. However, affordable pockets of the city such as Navi Mumbai, Thane and the fringe areas of western suburbs did well.

More details are available in the 11^th edition of PropIndex and complimentary edition of the "IIMB-MB Housing Sentiment Index" (HSI) - now on newsstands and online. You may also email [email protected] for the complete report.

About PropIndex:

MagicBricks.com PropIndex is a tool which empowers property seekers and investors with detailed information on the movement of residential apartment prices and supply of properties in India. No credible property index can be a function of direct values as the changes are governed by multiple factors. MagicBricks.com PropIndex has taken this reality into account and produced an index based on listing of apartments and their capital and rental values on the website.

About Magicbricks.com:

Magicbricks.com is India's No.1 property portal. With monthly traffic exceeding 6 million visits and with an active base of over 5 lakh property listings, Magicbricks provides the biggest platform for buyers and sellers of property to connect with each other in a clear, transparent manner. MagicBricks.com has over 500,000 active properties posted by more than 1,50,000 active users in 300 cities and 10,000 localities. Our users include owners, agents and developers. Our vision is to be a one-stop shop for property buyers and sellers. With this in mind, we have innovated several product features, content and research services, which have helped us to build the largest audience pool. We are part of The Times of India Group, India's biggest media conglomerate.

Primary Media Contact: Aseem Seth, [email protected], 91-120-6636338, 91-9910273367