The sentiment index for the real estate sector dropped marginally in the January-March period but remained positive, according to Knight Frank India and NAREDCO.
In its 36th edition of Real Estate Sentiment Index Q1 2023 (January-March), real estate consultant Knight Frank and industry body NAREDCO said that the current sentiment score, while safely within the optimistic zone, has seen a marginal dip from 59 in December 2022 quarter to 57 in Q1 2023.
This is mainly on account of stakeholder perception of the global recessionary environment and the risk of a future global downturn still exists, it said.
The sentiment index is based on the survey of supply-side stakeholders like developers, investors and financial institutions. The score of above 50 indicates 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral'. The score below 50 indicates 'pessimism'.
The Future Sentiment Score has increased from 58 in Q4 2022 to 61 in Q1 2023 on account of the resilience of India's macroeconomic indicators and improving domestic consumer confidence.
"Despite the uncertainty on the global stage, stakeholders are optimistic about the Indian economy and the real estate sector's performance for the next six months," the report said.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, said, the domestic consumer inflation has softened in many major economies, including in India in March 2023.
"Coupled with strong macroeconomic statistics, India remains largely resilient to global challenges while consumer confidence remains high. This is reflected well in the current sentiment index score that continues to be in the optimistic zone for seven consecutive quarters," he said.
In the last four quarters, the RBI has raised the lending rates by 250 bps after a long period of stable rates. Despite this, Baijal said the demand for real estate, especially residential, has strengthened in the country, boosting the confidence of the stakeholders of real estate sector for future sentiments.
Rajan Bandelkar, President of NAREDCO and Managing Director of Raunak Group, said, "Moving into the second quarter of 2023, the Indian economy and real estate sector are showing resilience and an optimistic outlook despite the possibility of a global economic slowdown."
Although the Current Sentiment Index Score has decreased from the previous quarter, he said, "we still have confidence in India's real estate market due to the rise in the Future Sentiment Score.
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