Sentiments regarding new launches are already showing a positive trend in the real estate.
India’s real estate sector seems to be experiencing a natural cooling-off period after a hot streak, which is a short-term challenge, say real estate developers.
Even as the market sentiments in the real estate sector were hit due to looming geopolitical tensions and global macroeconomic factors, industry players in India are hopeful about the growth in the realty sector over the next six months on the back of a stable economic environment.
According to the Knight Frank-NAREDCO Real Estate Sentiment Index Q2, 2024 (April-June 2024) report, the current sentiment index score has moderated to 65 from its all-time high of 72 in Q1, 2024. The future sentiment score declined to 65 from 73.
However, sentiments regarding new launches show a positive trend.
“While both current and future sentiments remain firmly in the positive zone suggesting a continued belief in the sector’s long-term prospects, the scores reflect a more tempered view on recent real estate growth, influenced by election and budget speculations,” Knight Frank said.
A score of 50 represents a neutral view or status quo; a score above 50 demonstrates a positive sentiment; and a score below 50 indicates a negative sentiment.
Real estate developers called this dip in sentiments as a cooling-off period but underlined the confidence of stakeholders.
Angad Bedi, managing director of BCD Group, said, “India’s real estate sector seems to be experiencing a natural cooling-off period after a hot streak. The recent real estate sentiment index report reveals a slight dip in both current and future sentiment scores. However, this is a short-term challenge, and the silver lining is real estate stakeholders’ confidence in launching new housing projects since they are optimistic about the sector’s long-term growth prospects.”
Real estate developers across India are on an expansion spree with major realty players launching projects in newer markets. This reflects the sector’s sense of optimism and bullish outlook for the future.
According to ICRA, launches across the top seven cities are expected to rise 12 per cent year-on-year to 767 million square feet.
Bedi further said, “Vigilant investors are taking a more measured approach because of macroeconomic uncertainties and volatile fiscal policies. Overall, the market is stable and growing, but it is important to closely monitor the economic conditions to avoid risks.”
According to Anarock, housing sales across the top seven cities saw a 14 per cent rise at 1,30,170 in Q1 while declining 8 per cent in Q2 at 1,20,340 units owing to a high base. Housing sales continued to be robust even in tier 2 cities. According to data analytics firm PropEquity, sales increased 11 per cent to 207,896 units in 2023-24 as against 186,951 units in the preceding financial year. Housing prices also rose by up to 90 per cent in these cities.
Sanjoo Bhadana, managing director of 4S Developers, said, “The homebuyers’ sentiments on the ground, displayed by strong sales and lineup of new supply by developers, point to a robust growth and optimism going forward. Despite any looming geopolitical crisis, the favourable fiscal and monetary policy environment will continue to guide India’s economic growth.”
Developers reiterated the optimism about the underlying fundamentals being robust.
Shashank Vashishtha, executive director of eXp Realty India, said, “The long-term prospects of the real estate market are optimistic. The underlying fundamentals remain robust, driven by factors such as increasing urbanization, rising disposable incomes, and government initiatives to boost affordable housing. Moreover, the growing preference for homeownership, coupled with the increasing number of working professionals, is expected to drive demand for residential properties in the coming years. The real estate sector will continue to evolve and deliver value to investors and homebuyers alike.”
Property brokerage firms insist that positive sentiments towards new launches will be a big boost for the sector.
Shiwang Suraj, founder and director of InfraMantra, said, “The rise in sentiments on new project launches in the coming months point to a positive long-term prospect in the residential segment. A temporary phase of watchfulness can be seen in the survey but the future outlook looks emphatic for the real estate sector.”
