Current, future sentiments indices in realty sector hit all-time highs during Jan-Mar: Report

Sentiments in the real estate sector were at an all-time high during the January-March 2022 period and developers expect the next six months to be equally bullish with Future Sentiment Index touching a new record in view of robust demand for housing and commercial properties, according to Knight Frank–NAREDCO survey.

As per the Real Estate Sentiment Index report, the Current Sentiment soared to a new high of 68 - indicating that most of the stakeholders experienced positive developments in their businesses in the last six months including the period of survey.

''The Future Sentiment score recorded at 75 was at a historical best. This score indicates the expectations of the developers/investors for the next six months from the time of the survey,'' Knight Frank India said in a statement.

The score of above 50 indicates 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral', while a score below 50 indicates 'pessimism'.

''The Current Sentiment score increased from 65 in Q4 2021 to 68 in Q1 2022 as the last six months remained positive for growth for most real estate stake holders. As the Indian economy navigated the third wave whilst being faced by uncertainty of a war in Europe, the real estate sector momentum remained unabated, especially of the residential segment,'' the consultant said.

The commercial real estate segments also showed growth after the hiatus of the pandemic.

The Future Sentiment score soared to 75 in Q1 2022 in view of a resolute economic outlook and continued demand for real estate space across asset classes.

With the removal of all COVID-19 protocols by the Indian government, there is a further boost in sentiments.

Shishir Baijal, Chairman and Managing Director, Knight Frank India said, ''The growth in the residential market has been impressive, elevating the sentiments of the entire sector. As most companies start calling their staff back to work, office space demand has also been growing steadily.'' The buoyancy in stakeholders' take on the sector reflects positively in both the Current and Future Sentiment Scores.

''However, geopolitical tensions impacting crude oil prices, are leading to a rise in inflation in Indian market, which can impact demand from end users. The scenario is further complicated with supply chain disruptions, rise in input cost and an impending interest rate hike, all of which need to be watched carefully in the near future,'' Baijal said.

NAREDCO India President and Director of Raunak Group Rajan Bandelkar said the rise in cost of raw materials such as steel and cement is a concern for the sector.

However, these concerns will likely get mitigated in the next few quarters, he added.