HYDERABAD: Positive sentiment is back in the real estate sector now after a long gap, according to Knight Frank India and Federation of Indian Chambers of Commerce and Industry’s (FICCI) Real Estate Sentiment Index (RESI) report for the first quarter of the year 2016 released on Friday.
Real Estate Sentiment Index tracks the perceptions of stakeholders of realty sector like builders, investors, private equities on both present and future expectations about the industry and comes up with a forecast for the industry. Much to the cheer of realty sector insiders and home and property buyers, the positive sentiment scores bounced back this quarter.
“After a lull of five quarters, the overall sentiment has experienced a sharp uptick, riding on the back of the Union Budget’s focus on real estate and infrastructure. Additionally, the Real Estate Regulation Bill becoming an Act has boosted the sentiment further since the sector is expected to become much more transparent and organised which, in turn, will benefit all the stakeholders,” said Samantak Das, chief economist and national director (research) of Knight Frank India explaining the reasons for the positive Real Estate Sentiment (Residential and Commercial) for the first quarter of 2016.
The stakeholders have been optimistic about the office market for quite some time now and the same trend has been reflected in RESI survey as well. The residential sector, on the other hand, has restored positive sentiment amongst the developers and lenders for the first time after four quarters, says the report.
Residential sector is expected to get on a recovery path as there is a considerable improvement in the sentiments for the residential sector. The pressure on unsold inventory has been reducing for the last four quarters due to the limited number of new launches. Developers have been focusing on project completions and instilling confidence in buyers.
“The benefits provided to buyers in the Union Budget 2016 are also expected to push demand further. Stakeholders are quite optimistic about residential sales. Nearly 54 percent of the respondents believe that the demand will pick up in the next months,” pointed out Samantak Das.
RESI index also points out to renewed optimism among commercial space segment with stakeholders being optimistic about the office market, in leasing volumes and rental appreciation. Nearly 73 percent of the respondents in the survey expect the leasing volumes to improve in the next six months. In view of the limited office supply, stakeholders are of the opinion that the office space rental increase will be better in the next six months.