Future Real Estate Sentiment Scores Remain Optimistic
The 29th Edition of Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q2 2021 (April – June 2021) Survey cited that the future sentiments of real estate sector stakeholders remained optimistic in Q2 2021 despite the second COVID wave that struck during this period.
Further, the stakeholders’ reaction to the second pandemic wave was not as severe as it was during the first wave as indicated by the relatively lesser drop in sentiment scores in Q2 2021. The Current Sentiment score has dropped from 57 in Q1 2021 to 35 in Q2 2021, but the drop is less intense than it was during the first COVID wave (Q2 2020) when the score had hit an all-time low of 22.
The Future Sentiment score has inched down marginally from 57 in Q1 2021 to 56 in Q2 2021 continuing to remain in the optimistic zone. Here as well, the outlook of stakeholders reflects more resilience in Q2 2021 than in Q2 2020.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “The tragedy of the second wave of pandemic has pushed the overall industry sentiments down in the second quarter of 2021. However, our learning from the first wave, as well as a less stringent lockdown in the second wave, have equipped us well to mitigate the severity of the economic ramification, showing some level of positive outlook among the stakeholders when compared to the dead low sentiment score of 22 during the same period last year. The availability of vaccines, a robust vaccination programme, along with continued economic activities have been the primary reason for the optimistic future sentiment score, as compared to last year. The real estate sector is treading cautiously and acknowledge that there is latent demand for both office and residential sectors, albeit hindered by the prolonged pandemic.”
Commenting on the report, Dr Niranjan Hiranandani – National President – NAREDCO highlighted key indicators. “The calibrated reopening of economic activities with accelerated inoculation drive has resulted in an upward trajectory of home buying demand and sales in June on back of stability and security it offers during the deep crisis. The uptick in sales velocity has led to reduction in ready to move inventory and thus encouraging branded developers to gear for new launches in forthcoming quarters. As the renters turn into the first -time home buyers and existing homeowners upgrade to the larger luxurious apartments to incorporate the new normal lifestyle, this trend will garner traction among the discerning new-age home buyers. Outlook for the commercial office market has also been progressive in Q2 2021, for both, leasing, and rentals. The demand for office or dispersed commercial portfolios will expand on the back of consolidation trend and expansion of satellite offices following the HUB and SPOKE model. The remote work near home trend will give fillip to new commercial development in suburban business districts. Thus, the next few quarters should see alignment to the new normal work trend shaping up in the work-sphere.”