The flagship survey conducted quarterly by Knight Frank India and National Real Estate Development Council (NAREDCO) noted that Current Sentiment soared to a new high of 68 – indicating that most stake holders experienced positive developments in their businesses in the last 6 months including the period of the survey.
Importantly, the Future Sentiment score recorded at 75 was at a historical best. This score indicates the expectations of the developers / investors for the next six months from the time of the survey.
The Current Sentiment score increased from 65 in Q4 2021 to 68 in Q1 2022 as the last six months remained positive for growth for most real estate stake holders.
The Q1 2022’s survey findings present a very optimistic stakeholder outlook for the residential market in the next six months on the back of strong homebuying demand.
80% of the survey respondents expect residential sales to increase in the next six months. This is a significant improvement over Q4 2021, when 72% of the respondents had a similar view.
78% of the survey respondents in the current quarter expect residential prices to increase in the next six months. During Q4 2021, only 34% of the survey respondents had a similar take. Stakeholders’ sentiments about residential launches also remained upbeat for the next six months. 80% of stakeholders expect residential supply to increase in the next six months.
The Future Sentiment score, which gauges the stakeholders’ expectations for the next six months, also soared to 75 in Q1 2022 in view of a resolute economic outlook and continued demand for real estate space across asset classes. With the removal of all COVID-19 protocols by the Indian government, there is a further boost in sentiments.
South Zone remains the most optimistic market with the highest score across zones in the current quarter. The Future Sentiment Score for South has inched up from 64 in Q4 2021 to 66 in Q1 2022. Compared to Q4 2021, the Future Sentiment score for the North Zone has inched up substantially with an increase from 57 in Q4 2021 to 65 in Q1 2022 as key markets in the North Zone recorded good traction in both office and residential sectors. The other zones – West and East – maintained their optimistic position with a score of 57 each. Despite a marginal fall in East, where the score altered from 58 in Q4 2021 to 57 in Q1 2022, both these regions remained in the optimistic territory.
As the Indian economy navigated the third wave whilst being faced by uncertainty of a war in Europe, the real estate sector momentum remained unabated, especially of the residential segment.
Commercial real estate segments also showed growth after the hiatus of the pandemic. While the sentiments have been positive for the two previous quarters, this score is one of the best reached in the history of the survey.
When asked on their Economic Outlook for India, 85% of respondents in Q1 2022 expect the overall economic momentum to improve over the next six months. In terms of Credit Availability Outlook, 66% of respondents expect the funding availability to increase over the next six months, while 29% expect it to remain the same during the period.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “The growth in the residential market has been impressive, elevating the sentiments of the entire sector. As most companies start calling their staff back to work, office space demand has also been growing steadily. The buoyancy in stakeholders’ take on the sector reflects positively in both the Current and Future Sentiment Scores. However, geo- political tensions impacting crude oil prices, are leading to a rise in inflation in Indian market, which can impact demand from end users. The scenario is further complicated with supply chain disruptions, rise in input cost and an impending interest rate hike, all of which need to be watched carefully in the near future. ”