According to a report released by Kight Frank- NAREDCO Real Estate Sentiment Index Q2 of 2023, the Indian real estate sector saw a jump in sentiment during April-June. The current sentiment score during the quarter rose to 63 from 57 in the previous quarter, which ended on March 31.
The respondent’s evaluation of the situation now compared to six months ago is shown by the current sentiment index. A score of 50 denotes a status quo or neutral opinion, while a score over 50 shows a positive attitude and a score below 50 a negative one.
The future sentiment index, which gauges expectations for the following six months, increased throughout the quarter, moving from 61 to 64.
According to Chairman and Managing Director at Knight Frank India, Mr. Shishir Baijal, the Indian economy showed resiliency and recovered while experiencing high inflation in developed markets, giving stakeholders hope for the stability of the domestic economic environment and the performance of the real estate sector over the coming six months.
He added that the resilience of the Indian economy amid turbulent global developments and the inflation staying between the Reserve Bank of India’s tolerance limit of 2-6% led to the jump in both scores. In June, India’s retail inflation stood at 4.81%.
The East zone had the most sentiment out of all the zones, with a score of 73. Then came 64 in the West and 70 in the North. The sentiment score increased over the previous quarter in each of these zones. The sentiment score in the South zone moderated somewhat, dropping from 62 in the prior quarter to 55 between April and June.
The report also stated that the sentiment was optimistic on all fronts including sales, launches and pricing. Compared to the past quarter, the percentage of stakeholders who expect residential sector growth has increased this time on all fronts.
Owing to the rate hike pause by the Monetary Policy Committee (MPC), between April-June, 55% of the respondents expected residential sales to increase in the next six months. This is higher than 48% who said the same in the January-March quarter.
In terms of launches, 62% of the stakeholders said that residential launches will improve in the next six months. It was 56% in the previous quarter.
However, most respondents also think that price increases would continue in the industry. Due to the consistent demand for residential property, 64% of them predicted that residential prices would rise in the upcoming six months. Comparatively, 61% of those surveyed had the same opinion in the preceding quarter.
