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    Real estate sector sentiment at all-time high in Q4 2021, shows report

    Synopsis

    As per the report, the Future Sentiment score, that gauges the stakeholders’ expectation in the short to medium term, also remains in the optimistic zone, albeit, dipped from 72 in Q3 2021 to 60 in Q4 2021, reflecting a prudent optimism as the Omicron inflicted risk on the Indian economy is yet to be discerned.

    Real estateAgencies
    The report mentioned, compared to Q3 2021, the south and east zones’ future sentiment score has inched up in Q4 2021.
    The sentiment Index Score of the sector has notched up to an all-time high of 65 in Q4 2021, on account of the reduced uncertainty on the economic front leading to stability in demand in the real estate sector, said Knight Frank India, in its latest report “Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index.

    The previous high reached was a sentiment score of 63 in Q3 2021. As per the report, the Future Sentiment score, that gauges the stakeholders’ expectation in the short to medium term, also remains in the optimistic zone, albeit, dipped from 72 in Q3 2021 to 60 in Q4 2021, reflecting a prudent optimism as the Omicron inflicted risk on the Indian economy is yet to be discerned.

    Shishir Baijal, CMD, Knight Frank India said, “While good demand conditions prevail for the real estate sector, stakeholders are adopting a cautious approach in the wake of the uncertainty arising from the third wave of COVID -19. The real estate sector has demonstrated an indomitable spirit and has remained robust in the last 5 quarters mostly led by the residential sector growth. In terms of the commercial real estate sector, the segment retained its momentum from the previous year as corporates continue to sign up for new spaces for their future growth as demonstrated by the robust hiring in the last 3- 4 quarters.”

    The report mentioned, compared to Q3 2021, the south and east zones’ future sentiment score has inched up in Q4 2021. The future sentiment score for the south zone increased to 64 in Q4 2021 from 62 in Q3 2021 as key southern markets recorded good traction in both office and residential sectors.

    The east zone’s score rose from 57 in Q3 2021 to 58 in Q4 2021. The north and west zones remained optimistic with scores of 57 and 56 respectively in Q4 2021. As the Omicron variant of COVID – 19 related risks unfold, stakeholders in these zones remain cautiously optimistic for the near term.

    Sanjay Dutt, Joint Chairman – FICCI Real Estate Committee and MD Tata Realty Infrastructure Ltd said, “With housing affordability in India at its decadal best, residential sales registered 59% growth. On the commercial side, leasing activity is again ramping up due to robust underlying demand from IT/ITES and global MNCs, augmented by a surge in smart cities and CBDs. As we deal with each wave more confidently, I am sure that we are on the cusp of a very exciting and unprecedented cycle of real estate growth.”

    The residential market has seen a significant uptick in demand due to record low home loan interest rates and the RBI’s firm assurance in maintaining the status quo has further boosted demand in the market. The segment has also been supported by conducive government policies keeping market sentiment buoyed.

    According to the report, 60% of the respondents expect the credit situation to maintain status-quo over the next six months, while 37% expect it to increase during the period.

    On the office market outlook, 61% respondents in Q4 2021 opined that office leasing will remain stable over the next 6 months with rents expected to improve in Q4 2021, compared to Q3 2021, when 27% respondents felt office rents may increase in next six months. In terms of new office supply, 88% of the Q4 2021 respondents are of the opinion that new office supply will either remain stable or will witness an increase over the next six months.


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