Real Estate Sentiment Up: Builders &' Institutions Bullish - Report
Feb 18, 2024 13:36
Real estate sentiment remains optimistic with builders and financial institutions expecting strong demand. Knight Frank and NAREDCO report shows index rising to 69 in Q4 2023.
New Del, Feb 18 (PTI) Real estate developers and financial institutions are bullish on their outlook for the property market for the next six months and expect the high demand to sustain its momentum, according to a Knight Frank and NAREDCO report.
Real estate consultant Knight Frank and realtors' body Naredco on Sunday released their 39th edition of Real Estate Sentiment Index for Q4 2023 (October-December 2023).
As per the report, the current sentiment index score remained in the optimistic zone, rising to 69 from 59 in the third quarter of 2023 calendar year.
The sentiment index is based on the survey of supply-side stakeholders like developers, investors and financial institutions.
A score of above 50 indicates 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral'. The score below 50 indicates 'pessimism'.
The future sentiment score, which indicates stakeholders' outlook, has also increased from 65 in Q3 2023 to 70 in Q4 2023, driven by general optimism about the Indian economy and sustained demand in the real estate sector, the report said.
"The real estate sector has witnessed a notable phase of growth in recent quarters, with all major segments, including residential, office space, industrial, warehousing, and retail, demonstrating consistent progress," Knight Frank India Chairman and Managing Director Shishir Baijal said.
This growth is underpinned by the country's stable economic outlook, he added.
In 2023, Baijal said the residential sales reached a decade-high, while the office sector experienced its second-best year, with 59.6 million square feet of office space transactions.
"Thus, the optimism among stakeholders towards real estate, both for the present and the future, is firmly rooted in a prolonged period of growth, which now appears to be sustainable for the mid to long-term...," Baijal said.
Naredco President G Hari Babu said the future sentiment score points to optimism about India's economic growth. "Globally, with easing inflationary pressures, there is a balanced risk perspective. Regionally, all zones maintain an optimistic outlook," he said.
"The residential market sees increased confidence, and the office sector anticipates growth. This signals a positive trajectory for the next six months," said Hari Babu.
Despite the Reserve Bank of India's 250 basis points increase in policy rates from May 2022 to February 2023 and a steady rise in residential prices, Knight Frank said India's top seven cities saw a ten-year high in annual residential sales, growing 5 per cent annually to 329,097 units in 2023.
The residential market outlook reflects enhanced optimism on parameters of residential sales and launches, the report said.
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