There is growing optimism about the growth of India's real estate sector in the next six months, according to a Knight Frank-NAREDCO survey released on Friday. In the residential market, optimism prevails as 62 per cent of respondents expect a rise in residential prices supported by consistent demand, mainly from the luxury segment with ticket size Rs 10 million and above.
As many as 40 per cent of respondents anticipate sales growth, and 38 per cent expect market stability. Likewise, the office market is optimistic with strong confidence in key parameters such as leasing, supply, and rents, pointing to stakeholder optimism for strong performance over the coming months, the report adds.
The Knight Frank-NAREDCO Real Estate Sentiment Index measures the perceptions of supply-side stakeholders and financial institutions with regard to the real estate sector, economic climate, and funding availability. The score is neutral at 50; a score greater than 50 is positive in sentiment, and below 50 is negative.
The Developer Future Sentiment Score rose from 61 in Q2 2024 to 65 in Q3 2024 indicating renewed optimism. Developers remain positive, adapting to shifting market dynamics and leveraging ongoing sales momentum, the report said.
Meanwhile, the Non-Developer Future Sentiment Score-including banks, financial institutions, and PE funds-held the line at 68 through Q2 and Q3 2024 as they feel that well-structured real estate projects, coupled with long-term sector growth prospects, bode well for their business, according to the report.
Knight Frank India CMD Shishir Baijal said, "The Q3 2024 Real Estate Sentiment Index emphasizes the strength of India's real estate sector. Here, though the Current Sentiment Score eased a tad, the Future Sentiment Score improved, reflecting better confidence among stakeholders. There is strong demand in the high-end residential sales markets and stable leasing in commercial, which underlines the fact that the sector is operating steadily.
The office market outlook for Q3 2024 is strong and positive, with stakeholders very optimistic about the sector's long-term potential. Indeed, 76 per cent of respondents expect office leasing to improve, driven by positive corporate sentiment and sustained recovery in demand. Office supply is also expected to increase, with 47 per cent of respondents expecting this.
The optimism even reaches to the rental performance, since 73 per cent of the respondents expect a growth in office rents driven by a growing demand for high quality office spaces. These results reflect the robustness and growth trajectory of India's office market driven by the favorable economic climate and evolving corporate needs.
Based on the survey findings 46 per cent of respondents await improvement in the economic situation reflecting softer optimism regarding resilience and potential growth in the Indian economy, while a significant 47 per cent anticipate higher availability of funds with moderated confidence as opposed to 51 per cent in the previous quarter.
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