Stakeholders turn cautiously optimistic

Mumbai: The Current Sentiment score has scaled down marginally from 62 in Q2 to 61 in Q3 mainly on account of the economic scenario playing out globally and current geopolitical risks due to the intensification of Russia-Ukraine war, says Knight Frank Sentiment Index Q3 report.

Despite the external challenges, the outlook for India remained resilient in the wake of tightening monetary policy measures and the real estate sector's performance in the past six months.

The Future Sentiment score has shrunk from 62 in Q2 to 57 in Q3 on account of growing global uncertainty and recessionary forecasts in major developed markets which may impact Indian businesses.

Talking to Bizz Buzz, Shishir Baijal, CMD of Knight Frank India says, "Over the past few quarters, the overall growth across all economies has been curtailed because of the increasing inflation rate and the geo-political unrest. Even after the lowered growth estimate of FY 2022, Indian economy continues to remain the fastest growing large economy in the world."

"On ground sales momentum on the housing market continues to reflect strength given that the domestic demand driver is still intact. However, the supply side stakeholders taking note of the global situation, have turned cautiously optimistic and this is reflected in the Future Sentiment Index that we have measured," he said.

In Q3, the Current Sentiment Index score and Future Sentiment Score have both moderated downwards as stakeholders remain cautious in the current economic climate as impact of global economic headwinds on Indian economy is yet to play out. Additionally, the housing affordability has shrunk further after the repo rate hike in September.

In West, the regional stakeholder declined marginally but remained firm in the optimistic zone in Q3.

In North, the regional stakeholder sentiments have reduced from 66 to 62. Developer Future Sentiment score has declined from 61 in Q2 to 53 in Q3. Non-developer (which include banks, financial institutions, PE funds) Future Sentiment score has scaled down from 64 in Q2 to 60 in Q3.

Residential market outlook in Q3 reflects caution as stakeholders expect supply and launches to improve but maintain a similar outlook on prices as observed in the past period. In Q3, the stakeholder outlook for all office sector parameters – supply, leasing and rents remained positive with stakeholders anticipating an increase for all.