+91-8069099774
The quarterly report by Knight Frank India, Federation of Indian Chambers of Commerce & Industry (FICCI) and National Real Estate Development Council (NARDECO) captures the perceptions and expectations of industry leaders in order to judge the sentiment of the real estate market.
The real estate sentiment index is launched jointly by FICCI and Knight Frank. This index is based on the quarterly survey of developers, private equity funds, banks and NBFCs. The survey has questions relating to economy, project launches, sales, leasing volumes, price appreciation and funding.
The report is divided into two sections – overall current sentiment and overall future sentiment. A score of 50 represents neutral view, above 50 demonstrates positive outlook, while a reading below 50 indicates negative sentiment. This survey was conducted in January 2019.
- The survey indicates that for the next six months, the sector will have a positive outlook because of the stable policy environment of structural reforms implemented in 2017.
- Further, it notes that there is general optimism around the launches, with the hope of a gradual upward incline. The residential sales and new launches are expected to advance with affordable and mid segment to lead amidst government initiatives and developer realignment of product-mix.
- The stakeholders have opined that the buyers are still in the “wait and watch mode” which will dampen sales. Future sentiments for price increase, however, remained marginally down, indicating that the sector does not expect any price rise in the coming six months.
- Majority of stakeholders believe that residential sales will improve in the coming six months. Insights suggest that with the clarity brought about by the structural reforms, notable developers are keen to bring fresh supply in the market.
- Residential prices are expected to remain stable, while launches and sales expected to pick pace. The outlook for the office sector remains optimistic. The turbulent funding environment is viewed as turning positive in the calendar year.
Backed by positive economic fundamentals, healthy demand and quality supply infusion across sectors, India’s real estate sector is poised for strong growth in 2019. In the last couple of years, developers have focused more on completing under-construction projects instead of launching new projects. Also, clearing existing inventory is a major challenge, especially in NCR, as most of it is situated in far-flung areas.
Potential home-buyers are negotiating for cash discounts instead of other offers that developers are offering. Investors planning to buy a house for end use will make the most of the real estate slowdown and prefer to choose from the ready-to-move-in inventory. Besides eliminating risks, like delay in construction, they can have a fair idea of what one is getting in terms of amenities, view from the apartment, construction quality and so on.
According to the report, the residential market front launches are expected to be in the mid and affordable segment largely because of government policies. The report states, “Optimism in sales has revived with the industry acceptance of RERA and GST. In the coming six month, office market will either improve or will hold on to its current reins but will definitely not get depressed. Going forward we believe that the real estate sector would witness better transparency and participation from organized players, which should further boost market sentiments.”
According to the report, National Capital Region will bounce back in the positive. The North zone was the only region that recorded negative sentiments in Q3 2017. However, the region has become optimistic following the expectation of RERA becoming a reality in the states of Uttar Pradesh and Haryana. In fact, the newly formed Gurugram and Panchkula benches of RERA have stated that the on-going projects in the state will also be brought within the purview of the regulation, a move expected to boost confidence levels in the reeling sector.
Report: http://www.naredco.in/notification/pdfs/SENTIMENT%20INDEX%20Q4%202018.pdf
Sources:
https://www.businesstoday.in/moneytoday/real-estate/real-estate-market-sentiment-index-falls-for-the-first-time/story/215046.html
https://housing.com/news/real-estate-sectors-sentiment-turns-to-cautious-optimism-report/
https://www.cbre.co.in/en/research-reports/India-Real-Estate-Market-Outlook-2019
https://www.dtnext.in/News/TopNews/2019/02/09021109/1106067/Real-estate-sector-shows-signs-of-cautious-optimism.vpf
https://www.newsbarons.com/real-estate/ficci-naredco-knight-frank-release-real-estate-sentiment-index/
Recent Comments