Strong demand in high-end residential sales and stable leasing in commercial spaces underscore the real estate sector's steady performance.

Real estate developers, banks, financial institutions and private equity funds remain positive on the sector's long-term growth prospects. While developers are adapting to shifting market dynamics and leveraging ongoing sales momentum, the non-developer segment exudes confidence in well-structured real estate projects, according to a sentiment index by Knight Frank and Naredco.

The outlook for the residential market remains in optimistic territory. In this quarter, 40% of the respondents expect residential sales to increase and 28% predicted stability. As many as 62% expect prices to increase. This demonstrates steady confidence in the market, with overall sentiment pointing towards gradual growth, as per the Real Estate Sentiment Index Q3 2024 (July-September 2024).

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.

Meanwhile, the Non-Developer Future Sentiment Score (comprising banks, financial institutions, and PE funds) maintains status quo at 68 through Q2 and Q3 2024, reflecting their confidence in well-structured real estate projects and the sector's long-term growth prospects.

Similarly, the office market outlook is buoyant, with strong confidence in key parameters such as leasing, supply, and rents, underscoring stakeholder optimism for robust performance in the coming months. According to the survey, 76% of respondents expect office leasing to improve, driven by positive corporate sentiment and a sustained recovery in demand. Additionally, 47% predict an increase in office supply, highlighting stability and continued growth in the sector.

This confidence extends to rental performance, as 73% of respondents anticipate a rise in office rents, fuelled by increasing demand for high-quality office spaces. These findings underscore the resilience and growth trajectory of India’s office market, bolstered by a favourable economic environment and evolving corporate requirements.

What does the sentiment index capture?

The Knight Frank – NAREDCO Real Estate Sentiment Index captures the perceptions of supply-side stakeholders and financial institutions regarding the real estate sector, economic climate, and funding availability.

A score of 50 indicates a neutral outlook; scores above 50 reflect positive sentiment, while those below 50 suggest a negative outlook.

There was a marginal dip in the current sentiment score, which stands at 64, down from 65 in the April-June period. However, the future sentiment score improved to 67, up from 65 in the previous quarter, signalling rising confidence in the sector's growth over the next six months, it showed.

“The Q3 2024 Real Estate Sentiment Index highlights the strength of India’s real estate sector. While the Current Sentiment Score moderated slightly, the Future Sentiment Score improved, reflecting growing confidence among stakeholders. Strong demand in high-end residential sales and stable leasing in commercial spaces underscore the sector's steady performance,” said Shishir Baijal, chairman and managing director, Knight Frank India.

Source: hindustantimes.com