Mumbai (Maharashtra) [India], May 20 : The first quarter of 2024 witnessed a surge in confidence across residential and office markets, a report by the Knight Frank-NAREDCO Real Estate Sentiment Index Q1 2024 (January - March) observed.
Factors such as stable economic fundamentals, sustained post-pandemic momentum, and increased transaction volumes played an important role in the surge in India's real estate market, according to the report.
The Current Sentiment Index Score soared to 72, ascending from last quarter's 69, and setting a decadal high. Driven by a strong domestic economy, the Future Sentiment score also saw an uplift, climbing from 70 in Q4 2023 to 73 in Q1 2024, as highlighted in the report.
The Developer Future Sentiment Score has increased from 68 in Q4 2023 to 72 in Q1 2024. The sale of residential units and office transaction volumes have also increased by 9 per cent and 43 per cent respectively on a YoY basis from Q1 2023 to Q1 2024, it added.
It further added, that about 82 per cent of respondents anticipated a rise in residential prices. Similarly, the office market outlook remains buoyant, with stakeholders confident in the performance across leasing, supply, and rent over the next six months. "The outlook for the residential market in Q1 2024 appears to be very optimistic with an 82 per cent response rate for an expected rise in residential prices."
A total of 80 per cent of survey respondents said that residential launches will improve in the next six months, whereas 73 per cent of the respondents expect residential sales to increase in the next six months as compared to 65 per cent in the previous quarter, it added.
Highlighting the region-wise trends in the real estate sector, the report added, except for the north all the other zones indicate a strong belief in the sector's performance for the next six months. "Despite a blip in the North zone's future sentiment score for the first quarter of 2024, it has remained in the optimistic zone."
Hari Babu, President-NAREDCO, said, "Stakeholders are exhibiting an inclination towards the expansion of the Indian real estate sector as they foresee a sustained consumer demand based on the Indian economy's robust trajectory in the forthcoming months."
In the first quarter of 2024, scores for all zones, except the North, increased and stayed in the optimistic zone, indicating strong belief in the real estate sector's performance for the next six months. Despite a dip in the North zone's future sentiment score, it also remained optimistic, showing continued high confidence in the market, the report observed.
Shishir Baijal, Chairman and Managing Director, of Knight Frank India, said, "e, stakeholders' expectations of increased economic momentum and funding availability in the coming months reaffirm the positive sentiment prevailing in the real estate sector."
"The first quarter of 2024 witnessed a surge in confidence across residential and office markets, driven by factors such as stable economic fundamentals, sustained post-pandemic momentum, and increased transaction volumes," he further added.
The report also noted that 68 per cent of respondents in Q1 2024 expressed increased expectations for economic momentum. With India's domestic economy remaining steady, business and consumer optimism is expected to grow even stronger.
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