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Current real estate sentiment index score at an all-time high in Oct-Dec: Report

Current real estate sentiment index score at an all-time high in Oct-Dec: Report

The Future Sentiment score, which gauges stakeholders' expectation in the short to medium term, dipped from 72 in Q3 2021 to 60 in Q4 2021 but remained in the optimistic zone.

For residential market, 72 per cent survey respondents expect sales to remain stable over the next six months. For residential market, 72 per cent survey respondents expect sales to remain stable over the next six months.

Despite the third wave of COVID-19 pandemic, the Current Sentiment Index Score of the real estate sector in the country rose to an all-time high of 65 in October-December quarter of 2021, according to property consultant Knight Frank India.
 
The previous high of Current Sentiment Index Score was a score of 63 in July-September 2021. A score of 50 represents a neutral view or status quo, a score above 50 demonstrates a positive sentiment, and a score below 50 indicates a negative sentiment.
 
"This improvement in the Current Sentiment Score is on account of the reduced uncertainty on the economic front leading to stability in demand in the real estate sector," a release said.
 
The Sentiment Score is a part of the Real Estate Sentiment Index for December quarter report, jointly developed by Knight Frank India, the Federation of Indian Chambers of Commerce and Industry (FICCI) and the National Real Estate Development Council (NAREDCO). The report aims to capture the perceptions and expectations of industry players in order to gauge the sentiment of the real estate market.
 
The Index is based on a quarterly survey of key supply-side stakeholders, including developers and non-developers -- financial institutions including banks, non-banking financial companies (NBFCs) and private equity (PE) funds.
 
The Future Sentiment score, which gauges the stakeholders' expectation in the short to medium term, dipped from 72 in Q3 2021 to 60 in Q4 2021 but remained in the optimistic zone, reflecting a prudent optimism as the Omicron inflicted risk on the Indian economy is yet to be discerned, the report said.
 
"With respect to the economic outlook, 75 per cent of respondents in Q4 2021 expect the overall economic momentum to remain stable over the next six months, while in terms of credit availability outlook, 60 per cent of the respondents expect the credit situation to maintain status-quo over the next six months, while 37 per cent expect it to increase during the period," it added.
 
Region wise, the Future Sentiment score of south and east zones inched up in December quarter. The score for south zone increased to 64 from 62 in September quarter as key southern markets recorded good traction in both office and residential sectors. For the east zone, the score rose to 58 from 57 in Q3 2021.

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"The north and west zones remained optimistic with scores of 57 and 56 respectively in Q4 2021. As the Omicron variant of COVID-19 related risks unfold, stakeholders in these zones remain cautiously optimistic for the near term," the report said.
 
On the office market outlook, 61 per cent respondents in October-December 2021 said that office leasing will remain stable over the next six months. Stakeholder outlook for office rents improved in Q4 2021 as 47 per cent respondents felt office rents may increase in next six months as compared to 27 per cent in September quarter.
 
For residential market, 72 per cent survey respondents expect sales to remain stable over the next six months, while 75 per cent of stakeholders fear new supply may decrease in the next six months. 62 per cent of the respondents expect a decline in residential prices over the next six months due to the Omicron virus related disruptions.
 
"The real estate sector has demonstrated an indomitable spirit and has remained robust in the last 5 quarters mostly led by the residential sector growth. Home loan interest rates are at a historic low and the RBI's firm assurance in maintaining the status quo has further boosted demand in the market," Knight Frank India CMD Shishir Baijal said.
 
The segment has also been supported by conducive government policies keeping market sentiment buoyed. In terms of commercial real estate sector, the segment retained its momentum from the previous year as corporates continue to sign up for new spaces for their future growth as demonstrated by the robust hiring in the last 3-4 quarters, he added.

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