Steady recovery in the economy along with record low home loan rates, attractive discounts and offers have helped sentiments in the real estate sector rebound. A pick-up in the pace of vaccinations has helped address the fear of a third Covid19 wave to a significant extent.
Better preparedness to handle the pandemic and bouncing back after the lockdowns have helped the stakeholders remain positive going forward.
The current and future sentiments of the property sector have improved across all parameters in the quarter ended September as the second Covid19 wave has subsided, showed a survey jointly conducted by Knight Frank, FICCI and NAREDCO.
The Current Sentiment Index score rose to 63–the best ever–after the dismal score of 35 recorded in the June quarter. The Future Sentiment Index score rose from 56 in June quarter to 72 in September quarter, which is also the highest ever.
“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.,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
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. The high volume of sales and leasing in both the residential and office sector coupled with the ongoing festive season has only enhanced the Future Sentiments of stakeholders for the next six months for all regions.
“As per the current market trends, the sentiment index is ticking all the right boxes and reporting close to double the growth, which was witnessed a year-and-a-half back. people have understood the importance of owning a house during this pandemic, and they are well supported by the all-time lowest possible interest rates on home loans coupled with offers extended by developers during this festive season,” said Rajan Bandelkar, President, NAREDCO India.
During the quarter, the optimism for the residential market outlook also strengthened with 89% of the survey respondents expecting residential sales to increase in the next six months. Regarding residential prices, 66% of the September survey respondents – up from 45% in June quarter – expect prices to increase in the next six months.
With respect to credit availability to the real estate sector, the stakeholder outlook continues to remain optimistic in Q3 2021. 61% of the survey respondents expect the credit situation to improve in the next six months, while 30% expect it to remain at current levels.
“The impact of Coronavirus on the Indian real estate sector was stifling to the point that it brought property transactions to a near-halt last year. Since then, the market has taken several strides towards recovery, and just when it seemed the revival was not far, the country was struck by another wave which was far more lethal. However, with an aggressive vaccination drive across India, the real estate sector has started showing signs of a sustainable recovery,” said Raj Menda, Joint Chairman, FICCI Real Estate Committee.
The real estate sector in India has seen a sharp rise in activities especially in the September quarter. Office sector recorded a 168% on-year rise in leasing activities at 12.5 million sq ft.
The residential sector also continued its forward pace with top markets recording sales of 64,010 units in the September quarter, a rise of 92% year on year. Stakeholder outlook on the office market saw an improvement in the September quarter especially with respect to supply and leasing activity.
