Mumbai : According to the 27 th Edition of Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q4 2020 (October – December 2020) Survey, for the first time in 2020 the 'Current Sentiment Score' entered the optimistic zone at 54 points in Q4 2020, a significant jump of 14 points over the previous quarter.
The 'Future Sentiment Score’ also witnessed a robust surge to 65 points in Q4 2020 from 52 points in Q3 2020. Geographically, the western part of the country saw the sharpest jump in Future Sentiment Index. This zone’s Future Sentiment jumped to 66 points in Q4 2020 from 47 points in Q3 2020. With respect to stakeholders, both developers and non-developers (which include banks, NBFCs and PE funds) recorded an improvement in Future Sentiment score in Q4 2020.
On the macroeconomic front, 82% of the survey respondents opined that the economy would grow further in the coming six months as opposed to the 57% respondents with the same view in Q3 2020.Similarly, the share of survey respondents with the opinion that economic health will worsen in the next six months went down substantially to 7% in Q4 2020 from 31% in Q3 2020. In terms of credit availability, 87% of the Q4 2020 survey respondents believed that the funding scenario would either improve or continue to remain the same over the next six months.
Further, 77% of the Q4 2020 survey respondents were of the opinion that residential sales would increase over the next six months, up from 66% in Q3 2020. With regards to the office market, 60% of the Q4 2020 survey respondents, up from 47% in Q3 2020, believed that office leasing activity would increase over the next six months. Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “Both the Current and Future Sentiment scores in Q4 2020 have seen great surge in the latest survey backed by revival in both residential and office market real estate that have been highly encouraging.
The sector saw a lift in the market's mood and increased stakeholder expectations of a stronger recovery in the next six months. As we begin our journey into 2021 with a positive outlook, it is important to closely watch the performance of the key economic indicators in the coming months to check the sustainability of the growth seen in the last two quarters of 2020. Equally crucial is the development of the vaccine and its widespread availability for the masses, these two factors will largely determine the performance of the real estate sector in the coming months.”
Dr. Niranjan Hiranandani, National President - NAREDCO and ASSOCHAM and Founder & MD, Hiranandani Group said, “As reflected in the 27th Knight Frank - FICCI - NAREDCO Real Estate Sentiment Index Q4 2020 Survey, it was resurgence that was powering optimism in real estate. The survey mirrors recovery expectations of not just real estate, but the economy. Investments in real estate over the recent past reflect positive sentiments on part of investors, domestic as also global, on the resurgence in the Indian economic growth story.
This is a clear indicator of the bullish growth story of Indian Real Estate and reflects on the growth prospects of 270 allied industries as also job creation. Recently, we have seen this investment being in the office spaces segment, which reflects the confidence of investors in the Indian GDP’s positive growth potential. Stakeholder outlook for the office market has improved substantially in Q4 2020 as leasing activity gained momentum.
The residential market outlook has revived further in Q4 2020, across all parameters, reflecting the increased traction in this segment. The impact of renewed consumer demand for residential realty has resulted in high levels of registration data, these transactions have lifted market sentiment. This bull run will be sustainable, growing through 2021, in the backdrop of the anticipated positive Union Budget – scripting the real estate revolution in India.”
Above views are of the author and not of the website kindly read disclaimer