Real Estate Market Sentiment Upbeat

The real estate sector is fast reaching a new growth trajectory that is comparable to the pre-Covid level. In fact, certain segments have even bettered the period preceding the pandemic.

According to Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q3 2021 (July - September 2021), both the current and future sentiments of real estate sector have improved across all parameters in Q3 2021. This marked improvement has been attributed to the economic recovery in the making. “The current edition captures the rebound in stakeholder sentiments towards the residential and office sector, as the second Covid-19 wave subsided. In Q3 2021, the Current Sentiment Index score rose to 63 – the best ever, after the dismal score of 35 recorded in Q2 2021,” says the study

Return of market confidence

Commenting on the improved market sentiment, Shishir Baijal, chairman and managing director, Knight Frank India, avers, “The sentiment index is a perfect reflection of the market sentiments. While in Q2 2021, just one quarter ago, sentiments were at the lowest, which have turned around dramatically in a matter of mere 90 days to be one of the highest in Q3 2021. This is heartening to see, as it is reflective of the returning market confidence backed by rising demand. Whether in the residential or the commercial segment, there is a strong sense of optimism due to the improvements in our socio- economic environment. The robust vaccination programme – with more than 100 crore people inoculated and the decline in the new COVID-19 cases; there is a significant revival in the commercial and residential real estate market. Regional markets in the East, West and North are seeing positive response from IT and ITeS companies as well as technology start-ups that have turned unicorns.”

Upturn in the commercial

Niranjan Hiranandani, vice chairman, NAREDCO, says, “A noticeable upturn in the commercial real estate sentiments in Q3 2021 coincides with the waning of Covid pandemic shockwaves, vaccinated workforce, upwards resumption of economic growth, positive sectoral outlook with softened interest rate and well infused liquidity in the economy. This nudges developers to chart out fresh lease supply to cater a dispersed portfolio. The ‘Back to Office’ with hybrid model, social distancing, and wellness quotient fuels demand for larger floor plates in Grade A office spaces offered by the branded players. The future of work will be skewed towards the ‘Walk to Work’ concept in the right coexistence of value offices and value homes striking perfect social, economic, and ecological balance.”  

Buyers sentiment up

In the context of residential real estate, the current and future sentiment for buyers is optimistic. The home owning sentiments complemented with conducive market economics in festive tailwinds prompts buyers towards the market. Various state governments have either announced or extended several sops such as stamp duty rebate and revision in circle rates to drive transactions in the real estate sector.

In Q3 2021, the optimism for residential market outlook also strengthened with 89% of the survey respondents expecting residential sales to increase in the next six months.

This is a sharp increase from the 64% respondents who held this opinion in Q2 2021. The sector has seen a sharp rise in activities especially in Q3 2021. Office sector recorded a Y-o-Y rise of 168% in office leasing activities recording total of 12.5 million square feet (msf) of office absorption. The residential sector also continued its forward pace with top markets recording sales of 64,010 units in July to September quarter, a rise of 92% year on year

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