Mumbai, Nov 7 (PTI) Indian real estate sector's futuresentiment plummeted to 39-month low in June-September2017 indicating a significant decline in optimism pertainingto its future performance, a recent survey said.
According to a survey jointly conducted byFicci-Naredco-Knight Frank, the future sentiment score in Q32017 stood at 55, reaching its lowest point over the past 39months.
"This indicates that the true impact of demonetisationand structural reforms such as RERA and GST have finally sunkinto the industry," the report said.
The report stated that majority of the stakeholdersfeel that the residential launches and sales are either likelyto worsen in the next six months or hold steady to theircurrent level, which itself is abysmally low.
Nearly 73 per cent of the respondents have opined thatthe residential price appreciation will either worsen orremain the same in the coming six months.
"Business sentiments in the recent history of realestate in India have hit the lowest levels of optimism. Whilesentiments are largely transient in nature, the prevalent moodin the industry reflects that it has finally come to termswith the short-term adverse impacts of the structuralreforms that became a reality over the past around 12 months,"Knight Frank India Chairman and Managing Director ShishirBaijal said.
He further said there is also an evident slowdown inthe economy with a steady decline in business performancesand the dwindling of capital expenditure to worrisome levels.
"Going forward I feel that the next 12 to 18 monthsare likely to be the 'under observation' period for the realestate sector. Industry stakeholders should spend the periodin reorienting businesses in line with the new order," Baijaladded.
According to the report, the office market is showinga much better future trend than the residential sector in Q32017.
Majority of the stakeholders foresee the office marketto either improve or maintain the present levels over the nextsix months. Nearly 82 per cent of the respondents opine thatoffice rental will either remain the same or would move up inthe coming six months.
"The residential sector which decides the trajectoryof the real estate industry in the country is likely tobe under continued pressure for the next six months. Theoffice market is relatively better off with majority of thestakeholders opining either a steady or improving leasingenvironment," Knight Frank India Chief Economist & NationalDirector - Research Samantak Das said. PTI PSKRMT.
This is unedited, unformatted feed from the Press Trust of India wire.