The sentiment in the real estate industry has turned optimistic and touched an all-time high during July-September and the outlook for the next six months also remains positive with recovery in the Indian economy and rapid progress in vaccination, according to a joint report by Knight Frank, FICCI and Naredco.
The sentiments in the real estate market had turned pessimistic during the April-June quarter because of the outbreak of the second wave of the COVID-19 pandemic. On Tuesday, property consultant Knight Frank and industry bodies FICCI and Naredco released their ”Real Estate Sentiment Index Q3 2021” based on the survey of developers, banks, financial institutions and private equity players operating in the sector.
As per the report, both the current and future sentiments of the real estate sector have improved across all parameters in Q3 2021, on account of the economic recovery in the making and waning of the second wave of the pandemic. In Q3 2021, the current sentiment index score rose to 63 – the best ever, after the dismal score of 35 recorded in Q2 2021, Knight Frank India said.
The Future Sentiment Index score rose from 56 in Q2 2021 to 72 in Q3 2021, which is also the highest ever in the history of the Index. A score of above 50 indicates ‘Optimism’ in sentiments, a score of 50 means the sentiment is ‘Same’ or ‘Neutral’, while a score below 50 indicates ‘Pessimism’.
Knight Frank Chairman and Managing Director Shishir Baijal said: “The sentiment index is a perfect reflection of the market sentiments, especially as we are amid the festive season.” In Q2, 2021, he said sentiments were at the lowest, which have turned around dramatically in a matter of mere 90 days to be one of the highest in Q3 2021.
“This is heartening to see, as it is reflective of the returning market confidence backed by rising demand,” Baijal said.He noted that there is a strong sense of optimism due to improvements in socio-economic environment.With a robust vaccination programme and the decline in the new COVID-19 cases, the consultant said there has been a significant revival in the commercial and residential real estate market.
“Regional markets in the East, West and North are seeing positive response from IT and ITeS companies as well as technology start-ups that have turned unicorns,” Baijal said.He attributed the rise in demand for office space to aggressive expansion in operations of e-commerce and start-up.
“High vaccine rate paired with concomitant sales from the festivities has kept the outlook for the residential sector positive,” he added. Raj Menda, Joint Chairman, FICCI Real Estate Committee and Chairman and Corporate Chairman, RMZ Corp said that “… With an aggressive vaccination drive across India, the real estate sector has started showing signs of a sustainable recovery.” Rajan Bandelkar President, NAREDCO India and Raunak Group said the positive outlook in the overall economy and the subsequent reduction in cases of covid, is bringing cheer to the market this festive season.