A recent report has highlighted that the optimism in the real estate industry stakeholders in India touched a decadal high in the first quarter of 2024.
The rise was due to the stable economic fundamentals, sustained post-pandemic momentum, and increased transaction volumes.
According to the Knight Frank-NAREDCO Real Estate Sentiment Index Q1 2024 (January–March) report, the “Current Sentiment Index Score”, which reflects the stakeholders’ current outlook compared to the preceding six months, touched 72 in the quarter, the highest in the last 10 years.
Notably, in the previous quarter, it was 69.
A score of 50 indicates neutrality, above 50 signals positive sentiment, and below 50 denotes negative sentiment.
It is determined by surveying developers as well as non-developers (including NBFCs) on parameters related to sales volume, launches and funding availability among others.
The report highlighted that the main driver of optimism is the residential market. As many as 82 per cent of the respondents expect residential prices to rise in the near future.
“Interestingly, this is the highest level of optimism recorded in the past decade, with no response indicating a potential price decline,” it said.
Further, 73 per cent said that they expect residential sales to increase further in the next six months, which was 65 per cent in the previous quarter.
As many as 80 per cent of the respondents said that the residential launches are also likely to improve in the next six months, higher than 71 per cent in Q4 2023.
According to the report, the sentiment is lower than in residential but still very optimistic in the office market.
In Q1 2024, 74 per cent of respondents said they expect office leasing to improve in the next six months, compared to 69 per cent in the previous quarter.
“Since the pandemic, optimism towards a rise in the office leasing market has grown significantly and the share of respondents having an opinion towards further increase has reached its highest in this quarter,” the report said.
“India’s office market has sustained the momentum gathered post-pandemic, witnessing year-on-year growth of 43 per cent in office leasing for Q1 2024 compared to the same period in the previous year.”