Real Estate Sentiment Index Hits 72 In Q1 2024

May 21st, 2024

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High in Optimism

The Indian real estate sector is experiencing a surge in optimism, with a report indicating a ten-year high in market confidence among stakeholders. This positive outlook is driven by a robust domestic economy, sustained post-pandemic momentum, and increased transaction volumes.

Key Findings of the Knight Frank-NAREDCO Real Estate Sentiment Index Q1 2024

The Knight Frank-NAREDCO Real Estate Sentiment Index Q1 2024 (January-March) report highlights the upbeat mood in the Indian real estate market. The Current Sentiment Index Score, reflecting stakeholders' current sentiment compared to the preceding six months, reached 72 in Q1 2024, surpassing the previous high of 69 recorded in the last quarter. A score of 50 indicates neutrality, above 50 suggests positive sentiment, and below 50 indicates negative sentiment. The report is based on a primary survey of developers, non-developers (including NBFCs), and gathers insights on sales volume, launches, and funding availability.

Residential Market Boom

The report identifies the residential market as the primary driver of optimism. A significant 82 per cent of respondents anticipate a rise in residential property prices in the near future. This marks the highest level of optimism recorded in the past decade, with no respondents expecting a price decline. Furthermore, 73 per cent of respondents expect residential sales to increase in the next six months, up from 65 per cent in the previous quarter. This positive outlook is attributed to factors like stable home loan interest rates and strong buyer sentiment. Additionally, 80 per cent of respondents believe that residential launches will improve in the next six months, compared to 71 per cent in Q4 2023.

Office Market Outlook

While less optimistic than the residential sector, the office market also reflects positive sentiment. In Q1 2024, 74 per cent of respondents expect office leasing activity to improve in the next six months, compared to 69 per cent in the previous quarter. This sustained growth in office leasing is supported by a year-on-year increase of 43 per cent witnessed in Q1 2024 compared to the same period in the previous year. Regarding office rents, 65 per cent of respondents anticipate an increase in the coming months, significantly higher than the 53 per cent recorded in Q4 2023.

Overall Positive Outlook

The Knight Frank-NAREDCO Real Estate Sentiment Index paints a promising picture for the Indian real estate sector. The robust economic environment and the government's commitment to economic growth are fueling stakeholder confidence. This positive sentiment is expected to translate into increased activity across the residential and office segments of the market.