Real estate industry

The real estate sector is optimistic about the improving outlook; General sentiment on the rise

Despite geopolitical tensions and inflation concerns, sentiment in the real estate sector remained bullish and hit new highs on the Knight Frank – NAREDCO Real Estate Sentiment Index Q1 2022. Findings appear in a quarterly survey conducted by Knight Frank India and National Real Estate Development Council (NAREDCO).

The current Sentiment Index score has reached a new high of 68, which means that most industry players have seen positive developments in their businesses over the past six months, including the period of investigation. Additionally, the Future Sentiment Score, which is based on future sentiments for the next six months, was recorded at 75, an all-time high. This means that industry stakeholders are also optimistic about a better situation over the next six months.

According to Shishir Baijal, President and Managing Director of Knight Frank India: “Growth in the residential market has been impressive, lifting sentiment across the sector. As most companies are beginning to call their staff back to work, the demand for office space has also steadily increased. The dynamism of stakeholders’ opinion on the sector is reflected positively in the current and future sentiment scores. »

“However, geopolitical tensions impacting crude oil prices are leading to higher inflation in the Indian market, which may impact end-user demand. The scenario is further complicated with disruptions supply chain, an increase in the cost of inputs and an impending rise in interest rates, all of which need to be watched carefully in the near future,” he adds.

Current feelings

The current sentiment score is 68 in the first quarter of 2022, down from 65 in the fourth quarter of 2021. The survey found that as the Indian economy passed the third wave of Covid-19, it was subject to a geopolitical shock external, namely the Russian-Ukrainian war. That said, the residential real estate segment remained unchanged despite these challenges. The commercial real estate sector also showed signs of growth as the pandemic came to an end. Overall, positive sentiment has prevailed in the real estate sector for the past two quarters, and the sentiment index for this quarter is one of the highest in the survey’s history.

future feelings

The future sentiment score was even higher, at 75, than the current score of 68. Industry stakeholders remained positive about a firm economic outlook for the next six months and hope for continued demand for real estate in different asset classes. Their feelings were further heightened when the Indian government lifted most of the Covid-19 protocols in different states.

The survey asked about their economic prospects for the Indian economy. A whopping 85% of respondents said they felt India’s overall economic momentum would improve over the next six months. In terms of credit availability, 66% of respondents expected the availability of finance to increase over the next six months, and 29% of respondents believed it would stay the same.

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