The 42nd NAREDCO-Knight Frank Real Estate Sentiment Index for Q3 2024 shows steady optimism in India's real estate sector. While the Current Sentiment Score dipped slightly to 64, the Future Sentiment Score rose to 67, reflecting confidence in upcoming prospects. Residential markets remain robust, with 62% expecting price increases and 40% foreseeing higher sales. The office market is equally strong, with 76% predicting improved leasing and 73% anticipating rent hikes. Developers' optimism grew, with their Future Sentiment Score rising to 65, while financial institutions maintained a steady 68. The sector benefits from stable interest rates and GDP growth projections of 7.2%, reinforcing long-term growth potential.
The 42nd edition of the NAREDCO-Knight Frank Real Estate Sentiment Index for Q3 2024, covering July to September, highlights continued optimism in India's real estate sector, despite a slight dip in the Current Sentiment Score to 64, down from 65 in Q2 2024. Encouragingly, the Future Sentiment Score rose to 67 from the previous quarter's 65, indicating growing confidence in the sector's prospects over the next six months. Both scores remain above the neutral mark of 50, reflecting enduring faith in the sector's long-term potential.
The residential market shows robust optimism, with 62% of respondents predicting a rise in residential prices, while 40% foresee increased sales, and 38% expect market stability. The luxury segment, particularly properties priced at Rs. 10 million and above, continues to drive demand. Additionally, 42% of survey participants anticipate improved residential launches, supported by consistent demand trends, while 36% foresee stability in this area.
In the office market, stakeholder confidence remains high. According to the survey, 76% of respondents expect office leasing to improve, driven by positive corporate sentiment and sustained recovery in demand. Moreover, 47% anticipate increased office supply, reflecting expectations of stability and continued growth. This optimism extends to rental performance, with 73% of respondents predicting a rise in office rents due to heightened demand for high-quality office spaces. These findings reinforce the resilience of India's office market amidst evolving corporate requirements and a favorable economic climate.
The report captures the perceptions of supply-side stakeholders and financial institutions regarding the real estate sector, the broader economic climate, and funding availability. A score above 50 signifies positive sentiment, while one below 50 reflects negativity. The Developer Future Sentiment Score rose from 61 in Q2 to 65 in Q3, reflecting growing optimism among developers who are adapting to market dynamics and leveraging strong sales momentum. Meanwhile, the Non-Developer Future Sentiment Score, comprising banks, financial institutions, and private equity funds, remained steady at 68, underscoring confidence in structured real estate projects and the sector's potential for long-term growth.
Hari Babu, President of NAREDCO, emphasised the sector's resilience and acknowledged that despite a marginal dip in the current sentiment score, the sector remains optimistic. He noted that the increase in the future sentiment score to 67 reflects stakeholders' confidence in the sector's prospects. The RBI's GDP growth projection of 7.2% for FY 2024-25 and a stable interest rate environment are expected to further boost investor sentiment. Developers appear particularly optimistic, as their Future Sentiment Score has risen to 65. As the sector continues to grow, he stressed that addressing challenges and leveraging opportunities will be key to achieving sustainable development.
The survey also highlights moderated optimism about India's economic scenario, with 46% of respondents expecting improvement compared to previous quarters. Similarly, 47% anticipate an increase in funding availability, reflecting tempered but steady confidence in the financial environment. Overall, the findings underscore a steady recovery and growth trajectory for the real estate sector.
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