Hyderabad: The current and future sentiment of the real estate sector have improved across all parameters in Q3 2021, on account of the economic recovery in the making, according to the latest and 30th edition of Knight Frank-Ficci-Naredco Real Estate Sentiment Index Q3 2021 (July-September 2021).
In Q3 2021, the Current Sentiment Index score rose to 63, highest 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. 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.
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.
Shishir Baijal, CMD, Knight Frank India said, “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.”
“Aggressive expansion in operations of e-commerce and startups 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,” Baijal added.
Rajan Bandelkar, president, Naredco India, said, “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.”
Office market sentiment
Stakeholder outlook on the office market saw an improvement in Q3 2021 especially with respect to supply and leasing activity. In Q3 2021, 65 per cent of survey respondents expect office leasing to increase in the next six months, significantly up from 40 per cent in Q2 2021.
In Q3 2021, 58 per cent survey respondents expected new office supply to improve over the next two quarters, while in Q2 2021, only 37 per cent had opined the same. Rental outlook is also strengthening with 28 per cent of survey respondents in Q3 2021 expecting an increase, compared to 21 per cent in Q2 2021.
In Q3 2021, the optimism for residential market outlook also strengthened with 89 per cent of the survey respondents expecting residential sales to increase in the next six months. This is a sharp increase from the 64 per cent respondents who held this opinion in Q2 2021.
Interestingly, the share of survey respondents that believe sales will decline in the next six months has substantially reduced from 18 per cent in Q2 2021 to three per cent in Q3 2021. Residential launches have also started gaining momentum. The share of respondents expecting an increase in new project launches climbed up from 58 per cent in Q2 2021 to 86 per cent in Q3 2021.
The stakeholder outlook continues to remain optimistic in Q3 2021. 61 per cent of the survey respondents expect the credit situation to improve in the next six months, while 30 per cent expect it to remain at current levels.