There has been an unprecedented surge in the real estate market confidence on the supply side, marking a significant milestone in the sector. The NAREDCO-Knight Frank’s Current Sentiment Index Score soared to 72, ascending from last quarter’s 69, and setting a decadal high.
“This remarkable achievement is underscored by the robust economic landscape in India, with stakeholders across the board expressing heightened confidence and optimism,” NAREDCO said in a statement.
Driven by a strong domestic economy, the Future Sentiment score also saw an uplift, climbing from 70 in Q4 2023 to 73 in Q1 2024. This positive trajectory reflects stakeholders’ sustained optimism regarding the Indian economy and the enduring demand in the real estate market, acccording to the NAREDCO-Knight Frank Real Estate Sentiment Index Q1 2024 (January – March) report.
The residential market outlook in Q1 2024 is particularly promising, with 82 per cent of respondents anticipating a rise in residential prices. Similarly, the office market outlook remains buoyant, with stakeholders confident in the performance across leasing, supply, and rent over the next six months.
The quarterly NAREDCO-Knight Frank report provides a comprehensive analysis, through a primary survey, of current and future sentiments in the real estate sector, considering the economic climate and funding availability as perceived by supply-side stakeholders and financial institutions. A score of 50 indicates neutrality, scores above 50 signal positive sentiment, and scores below 50 denote negative sentiment.
The Developer Future Sentiment Score scaled up from 68 in Q4 2023 to 71 in Q1 2024. With strong buyer sentiment for property and the Reserve Bank of India’s (RBI) consistent policy on the repo rate for over a year, real estate developers remain optimistic about sector growth over the next six months.
Meanwhile, the Non-Developer Future Sentiment Score, which includes banks, financial institutions, and private equity funds, remained stable at 73 across Q4 2023 and Q1 2024. Although institutional investors have maintained a cautious stance, their confidence in the Indian economy has notably increased during this period.
Hari Babu, president of NAREDCO, said, “The Knight Frank NAREDCO Real Estate Sentiment Index for Q1 2024 paints a buoyant outlook for the Indian real estate sector. With the Current Sentiment Index rising from 69 to 72 and the Future Sentiment Score climbing from 70 to 73, stakeholders demonstrate unwavering optimism, driven by the government’s commitment to aggressive economic growth. India maintains stability and offers fertile ground for real estate growth.”
The highest recorded Current Sentiment Index within the past decade underscores notable trends in residential and office segments, with significant upsurges in new launches, sales, and prices. NAREDCO remains committed to driving the real estate sector towards a path of sustainable prosperity and inclusive development, he added.
Shishir Baijal, chairman and managing director of Knight Frank India, said, “The significant rise of the Current Sentiment Index Score within the optimistic territory is driven by India’s robust economic landscape. Confidence among stakeholders has surged, with Indian enterprises, including those in the real estate sector, anticipating gains from a flourishing domestic economy.”
The 8.4 per cent GDP growth in Q4 2023 exceeded expectations, solidifying India’s position as the fastest-growing major economy globally. This growth reflects stakeholder optimism about the economy and sustained real estate demand, setting a promising tone for the real estate sector with ample opportunities for investment, expansion, and prosperity, he added.
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