Real estate sector sentiments revive to optimistic zone in Dec quarter: ReportPTI | New Delhi | Updated: 14-01-2020 17:19 IST | Created: 14-01-2020 17:19 IST
Real estate sentiments in the country revived in December quarter and turned optimistic after two quarters on the back of several measures taken by the government and the RBI to boost demand, according to a joint report by Knight Frank-FICCI-Naredco. After staying in pessimistic zone (below 50 mark) for two consecutive quarters, Knight Frank–FICCI–NAREDCO Real Estate Sentiment Index Q4 2019 survey showed that sentiments of real estate stakeholders in India was in optimistic zone at 53 in October-December quarter of 2019, up from 42 in the previous quarter.
The future sentiment score, that had gone in the red for the first time in the preceding July-September 2019 quarter at 49, also bounced back to 59 in Q4 2019. A score over 50 signifies 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral', while a score below 50 shows 'pessimism’.
Though the sentiment is in optimistic zone now, the qualitative outlook of stakeholders remains cautious, with a majority of them opining that the sector will remain at the same levels as previously even while it will not go down further in the next six months, it added. "The real estate sector sentiments have shown improvement in its current as well as expected outlook for the market in Q4 2019. This optimism is significant in the wake of the continued downslide in India's overall economic performance," Knight Frank India Chairman and Managing Director Shishir Baijal said.
"Even while the sector is working towards finding its balance, especially in the residential segment, steps by the government have kept the sector stable in 2019. However, we expect the market to remain cautious and sensitive to even the smallest change as large-scale demand is yet to pick pace," he added. The sector's optimism is far pronounced for the office sector, which has grown from strength to strength in the past few years, reaching historic highs in 2019.
"In the next 8-10 quarters, if the office, other commercial including retail, warehouse and logistics and the residential sector continue to show positive growth, despite the pace of growth of Indian economy, we can expect the real estate sector to show upward curve of revival. The sector, therefore, needs to start making adequate safeguards to ensure that the demand for all segments stays positive," Baijal said. The real estate sector has been under pressure for over three years now. Weak demand, inventory overhang, developer defaults coupled with worsening of NBFC crisis has dried up funding for the sector, which in turn has increased borrowing cost and impacted finances for the already strained sector, the consultant said.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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