The real estate sector in India is showing a more tempered but still positive outlook, according to the Knight Frank-NAREDCO Real Estate Sentiment Index Q2, 2024 report. While current and future sentiment scores have moderated from their all-time highs, the industry remains resilient, with notable activity in residential and office markets. Developers and financial institutions are adopting a cautious approach, anticipating potential macroeconomic and geopolitical developments that could impact market confidence, while remaining optimistic about the sector's long-term prospects.
Real estate developers and financial institutions are cautiously optimistic about growth in the realty sector over the next six months, despite geopolitical uncertainties, according to a report by Knight Frank-NAREDCO.
The 41st edition of Knight Frank-NAREDCO Real Estate Sentiment Index Q2, 2024 (April-June 2024) report shows that the current sentiment index score has moderated to 65 from its all-time high of 72 in Q1, 2024. Similarly, the future sentiment score declined to 65 from 73.
While both current and future sentiments remain firmly in the positive zone, suggesting a continued belief in the sector's long-term prospects, the scores reflect a more tempered view on recent real estate growth, influenced by election and budget speculations.
The adjustment in the future sentiment index reflects a positive yet more conservative outlook for the near term. This recalibration may be attributed to anticipatory caution around potential macroeconomic developments, including fiscal policies and geopolitical events, that could influence market confidence.
Despite the decline, with notable activity in residential and office markets, the sentiment remains in positive territory, showcasing the sector's resilience.
Knight Frank India's Chairman and Managing Director, Shishir Baijal, stated that the current and future sentiment score of 65 is still in positive territory, and this recent dip should not raise concerns as it simply indicates a shift toward cautious optimism in the real estate sector.
The economy remains positive with key indicators seeing stability while remaining resilient against the global geo-political developments, he added.
Baijal further emphasized that this adjustment highlights the sector's careful and measured approach, ensuring continued stability amidst ongoing economic and political developments, with positive sentiment driven by sustained growth in residential and office markets.
Despite the moderation in sentiment scores, the resilience and positive long-term outlook of the sector are evident, as key stakeholders continue to carefully monitor and adapt to the evolving market dynamics. This balanced mindset, coupled with sustained growth in residential and office segments, suggests that the real estate industry is well-positioned to weather the ongoing challenges and capitalize on emerging opportunities in the months ahead.
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