Signs of revival show in Indian realty’s future sentiments: Report

Signs of revival show in Indian realty’s future sentiments: Report
17/02/2018 , by , in News/Views

FICCI-NAREDCO-Knight Frank India unveiled the latest findings of the Real Estate Sentiment Index for Q4 2017 (October–December 2017). As per the survey, sector is slowly but surely coming out of the doldrums.

According to the report, after 6 months of pessimism in the quarter 2 and the quarter 3 of last year, the sentiment score has finally bounced back in the positive zone. The sentiment score had dipped in Q2 and Q3 in 2017 owing to the implementation of various structural reforms like RERA and GST by the Modi government.

“The sector is gaining optimism (now) on the back of reforms like RERA and GST. The residential segment is likely to witness increased transparency and see sporadic new launches by organised players, and demand largely in the mid and affordable segment will dominate the market. Increase in residential prices will thoroughly be guided by market dynamics and buyer interest. Office supply will be under stress and leasing volumes will hold steady in the coming six months. Office rentals will inch up owing to supply constraints,” the survey says.

As per the findings, the realty sector’s sentiments towards the economy doesn’t show any substantial change from the preceding quarter. Only 52 per cent of the stakeholders said the economy would be better in the upcoming 6 months as against 51 per cent in the quarter 3, 2017, while close to a third of them feel it would remain the same. “This status quo can be attributed to the fact that that the stakeholders are in the wait and watch mode and are giving time for the new Union Budget to take shape, which focuses on the rural economy and social sector,” the survey says.

However, a majority of the stakeholders have expressed optimism concerning the new residential launches in the coming 6 months, primarily in the mid and affordable segments, which can be attributed to the Modi government’s focus on the affordable housing segment in the last 3 budgets. Also, optimism regarding residential sales has come back in the market as against a dismal low in the preceding quarter. 52% of the stakeholders felt that the sales volume will be back once the dust around RERA and GST settles down, bringing transparency to the sector.

The office market also registered an improvement in future sentiments with a majority of stakeholders saying that the office segment will either improve in the upcoming 6 months or hold steady.

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