Real estate outlook for 2021 optimistic: Knight Frank-Ficci-Naredco study

About two-third of survey respondents believe residential sales and office leasing will improve over the next six months

Hyderabad: According to the 27th Edition of Knight Frank-Ficci-Naredco Real Estate Sentiment Index Q4 2020 (October–December) 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 at 40.

A score of above 50 indicates ‘optimism’ in sentiment, a score of 50 means the sentiment is ‘same’ or ‘neutral’, while a score below 50 indicates ‘pessimism’.

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The ‘Future Sentiment Score’ also witnessed a surge to 65 points in Q4 2020 from 52 points in Q3 2020. Geographically, the western India saw the sharpest jump in the Future Sentiment Index. This zone’s sentiment jumped to 66 points in Q4 2020 from 47 points in Q3 2020. The already bullish southern region improved marginally to 66 in Q4 2020 from 65 in Q3 2020.

On the stakeholder front, both developers and non-developers (which include banks, NBFCs and private equity funds) recorded an improvement in Future Sentiment score in Q4 2020.

Further, 77 per cent of the Q4 2020 respondents were of the opinion that residential sales would increase over the next six months, up from 66 per cent in Q3 2020. With regards to the office market, 60 per cent of the respondents, up from 47 per cent in Q3 2020, believed that office leasing activity would increase over the next six months.

On the macroeconomic front, 82 per cent of the survey respondents opined that the economy would grow further in the coming six months as opposed to the 57 per cent 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 seven per cent in Q4 2020 from 31 per cent in Q3 2020.

In terms of credit availability, 87 per cent 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.

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