Real estate sentiments improve in July-September: Report
The pandemic-hit sentiments among the real estate stakeholders improved in the July-September quarter, according to a report.
The 26th Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q3 2020 Survey has demonstrated significant improvement in future sentiments scores, for the next six months.
“The ‘Future Sentiment Score’ for Q3 2020 is in the optimistic zone at 52 points, up from 41 in the previous quarter,” said a Knight Frank India statement.
Further, the ‘Current Sentiments Score’ — for the past six months — also recorded a significant improvement from the previous quarter low of 22 points to 40 points in Q3 2020.
It noted that the revival in sentiments can be attributed to the upturn seen in the real estate business, especially in the residential segment, in the third quarter of 2020 as a result of the unlocking process.
A score of above 50 signifies ‘Optimism’ in sentiments, a score of 50 means the sentiment is ‘Same’ or ‘Neutral’, while a score below 50 shows ‘Pessimism’.
Shishir Baijal, Chairman and Managing Director of Knight Frank India said, “An increase in real estate activities has been a great morale booster for the sector. Quarter 3, 2020 (July-September) saw residential sales volumes increase to 55 per cent of pre-Covid levels, showing signs for revival. Low home loan rates and discounts/ attractive offers for residential homes, have pushed sales velocity in the third quarter.”
“Even while the volumes are yet to catch up to the pre-Covid levels, the spurt has been instrumental in perking up sentiments. Similar positivity is visible for the office sector as well, where we have seen a revival of leasing activities,” he said.
Baijal added that the return of end -users in the market, especially in the residential segment is a matter of cheer for the entire sector, as it indicates economic confidence and long-term commitments. The festive season in Q4 2020 is likely to further support the revival of the real estate sector.
“We are hoping that the government and allied agencies will encourage this growth with more supportive decisions,” he said.
Niranjan Hiranandani, National President, NAREDCO was of the view that the housing demand is expected to rebound strongly due to the pent-up demand on the parameters of safe and secured investment. The buyers are reaping the accrued benefits of lower stamp duty and lower risk weightage on home loans now linked to the loan-to-value ratio by the RBI.
“The consumption cycle has once again moved back into an optimistic zone salvaging the economic recovery. This will lead to economic recovery followed by real estate revival. This revival will improve employment and resuscitate GDP growth by 2021,” he said.