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Mumbai : The 30th Edition of Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q3 2021 (July - September 2021) cited that both the current and future sentiments of real estate sector have improved across all parameters in Q3 2021, on account of 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. A pick-up in the pace of vaccinations has helped address the fear of a third COVID-19 wave to a great extent. Coupled with better preparedness to handle the pandemic, bouncing back after the lockdowns is becoming the norm of the day. These developments have helped the stakeholders remain positive going forward. The Future Sentiment Index score rose from 56 in Q2 2021 to 72 in Q3 2021, which is also the highest ever in the history of the Index.

Current and Future Sentiment Scores at the highest ever

Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “The sentiment index is a perfect reflection of the market sentiments, especially as we are amid the festive season. 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. Aggressive expansion in operations of e-commerce and start-ups have been a key demand driver for office spaces. High vaccine rate paired with concomitant sales from the festivities has kept the outlook for the residential sector positive.”

Raj Menda, Joint Chairman, FICCI Real Estate Committee and Chairman and Corporate Chairman, RMZ Corp said, “The impact of Coronavirus on the Indian real estate sector was stifling to the point that it brought property transactions to a near-halt last year. Since then, the market has taken several strides towards recovery, and just when it seemed the revival was not far, the country was struck by another wave which was far more lethal. However, with an aggressive vaccination drive across India, the real estate sector has started showing signs of a sustainable recovery. This is reflected in a recent Knight Frank- FICCI- NAREDCO study, which reports the Future Sentiment score of 72 in Q3 2021, an impressive rise from the Q3 2020 score of 52.”

Rajan Bandelkar President, NAREDCO India and Raunak Group said, “The positive outlook in the overall economy, after the remarkable vaccination drive touching the momentous benchmark of 100 crore doses - which is a proud moment for India in itself, and the subsequent reduction in cases of covid, is bringing cheer to the market this festive season. in recent reports, the real estate sector is the biggest sectoral gainer over the past month, which is a positive sign not only for the sector but also for the ancillaries which are dependent on the growth of this sector. as per the current market trends, the sentiment index is ticking all the right boxes and reporting close to double the growth, which was witnessed a year and a half back. people have understood the importance of owning a house during this pandemic, and they are well supported by the all-time lowest possible interest rates on home loans coupled with offers extended by developers during this festive season.”

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. The high volume of sales and leasing in both the residential and office sector coupled with the ongoing festive season has only enhanced the Future Sentiments of stakeholders for the next six months for all regions. The Future Sentiment score for West Zone has increased from 60 in Q2 2021 to 67 in Q3 2021. For the North Zone, the score has increased from 55 in Q2 2021 to 63 in Q3 2021.

Zonal Future Sentiments

Stakeholder outlook on office market saw an improvement in Q3 2021 especially with respect to supply and leasing activity. In Q3 2021, 65% of survey respondents expect office leasing to increase in the next six months, significantly up from 40% in Q2 2021. In Q3 2021, 58% survey respondents expected new office supply to improve over the next two quarters, while in Q2 2021, only 37% had opined the same. Rental outlook is also strengthening with 28% of survey respondents in Q3 2021 expecting an increase, compared to 21% in Q2 2021.

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