Bengaluru: Business sentiment amongst real estate developers and financial institutions was at a decadal high in the January-March period of the ongoing calendar year, according to a Knight Frank-NAREDCO report released on Monday.
As per the report, the Current Sentiment Index Score soared to 72 during the first quarter of 2024, up 3 points from the previous quarter’s 69, on the back of a robust economic landscape and post-pandemic recovery in the sector.
The Future Sentiment Score also saw an uptick, climbing to 73 in Q1 2024, from 70 in Q4 2023, reflecting sustained optimism tied to demand within the sector in the subsequent six months.
“The first quarter of 2024 sets a promising tone for India’s real estate sector, with stakeholders navigating the landscape with confidence and optimism,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
The Future Sentiment Score amidst stakeholders across all regions, barring North India, saw an increase during the period under review. While the score for North India fell in the optimistic zone of over 50, it saw a dip to 65 in Q1 2024, from 78 in the previous quarter.
For the residential segment, 82 per cent of the survey respondents said that they expect a property price increase in the next six months while 73 per cent anticipate a rise in sales during the period.
Within the office segment, 74 per cent of the respondents underscored that they expect an improvement in leasing over the next six months, as opposed to 69 per cent in the previous quarter.
Business in the office segment is interconnected with global macroeconomic health, which has been battling a slowdown of late, and while this was reflected in India’s IT services sector, overall demand for office space leasing in India has remained robust on the back of a strong domestic economic growth. The metric recorded a 43 per cent year-on-year growth in the first quarter of 2024, compared to the corresponding period last year. Consequently, 65 per cent of the survey respondents expect office rents to increase in the second and third quarters of the calendar, the report noted.
However, only 58 per cent of the survey respondents during the period under review said that they expect a rise in office supply over the next 6 months, as opposed to 62 per cent in Q4 2023. “In Q1 2024, compared to the previous quarter, office supply decreased in Mumbai, NCR, Chennai and Ahmedabad, which reflects the stakeholders being inclined towards cautiousness,” reasoned Vivek Rathi, National Director Research, Knight Frank India.