Stakeholder sentiment on decline: Knight Frank
Dr Samantak Das, Chief Economist & National Director - Research, Knight Frank India shares an overview on India´s Real Estate Sentiment (Residential and Commercial) for Q3 2015. He said, "Delayed reforms have weakened the present business sentiment, which explains the downward trend in the current score. The supply-side stakeholders (developers and financial institutions) believe that today´s situation is worse, compared to what it was six months ago. Although the future score at 59 falls in the positive territory, the overall declining trend reflects the weakening business confidence. Stakeholders are particularly pessimistic about the residential sector and they do not foresee any significant recovery in the next six months. However, optimism about the future is driven mainly by the office space, which is expected to experience increase in rentals due to robust leasing volumes and limited supply."
Stakeholder sentiments have been sliding since Q4 2014, indicating their shaken confidence levels. This is the second quarter in a row, wherein the current sentiment score is below the positive mark. Stakeholders believe today´s situation to be worse compared to what it was six months ago. However, the respondents are of the opinion that the real estate market will improve in the coming six months. The future sentiment score, at 59, although in positive territory, continues to show a declining trend over the last four quarters.
The on-going festive season is unlikely to revive the residential sector in the major cities of India. Majority of the supply side stakeholders are of the opinion that the residential sector is not going to experience any upturn in sales and new launches in the coming six months. Nearly 82 per cent of the survey respondents feel that residential price appreciation is either going to remain the same or worsen in the coming six months.
Stakeholders are reasonably optimistic about the office market and 62 per cent of the respondents expect the leasing volume to improve at the back of limited supply. More than 50 per cent of the respondents feel that office space rentals will strengthen by the end of Q1 2016.
Although the survey participants across the country continue to be optimistic about the future, all the zones observed a dip in sentiment levels during Q3 2015 compared to the preceding quarter - a clear reduction in business sentiments across India. The north zone witnessed the steepest decline in the future sentiment score during Q3 2015. Stakeholder sentiments have barely made it into the positive territory in view of the current challenges faced by the underperforming residential sector in NCR. Although the Q3 2015 survey results show that developers and financial institutions believe that the market scenario will improve in the next six months, the level of optimism is demonstrating a declining trend since Q3 2014.
For further information:
Abanti Banik Manager - PR
Knight Frank India, Tel: +91 9972998403
Blue Lotus PR (For Knight Frank India)
Nishant Patankar, Tel: +91 9619554355