Future outlook for residential market in India remains optimistic: Report

Mumbai: The future outlook for the real estate market remains in the optimistic territory in India, showcasing the sector's resilience with notable activity in residential and office demands, a report showed on Wednesday.

The Knight Frank–NAREDCO report cited that the ‘Current Sentiment Index Score’ has moderated to 65 from its all-time high in Q1 2024, indicating a measured outlook among stakeholders. Future sentiment score for this period also recorded a recalibration in Q2 2024 and was recorded at 65.

The report mentioned that 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”.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said that the current and future sentiment score of 65 is still in positive. “The economy remains positive with key indicators seeing stability while remaining resilient against the global geo-political developments,” said Baijal.

With positive sentiment driven by sustained growth in residential and office markets, this adjustment highlights the sector's careful and measured approach, ensuring continued stability amidst ongoing economic and political developments, he added.

The Future Sentiment Index has adjusted from 73 in Q1 2024 to 65 in Q2 2024, reflecting a positive yet more conservative outlook for the near term.

According to the report, the residential market outlook in Q2 2024 sustains optimism with 63 per cent response rate for an expected rise in residential prices while 51 per cent of the stakeholders anticipate an increase in sales with a significant portion of 24 per cent respondents expect stability.

“The office market outlook exhibits buoyancy on all key parameters - leasing, supply and rent as the stakeholders remained confident of the performance of this asset class in the next six months,” the findings showed.

“The residential and office markets continue to show notable activity, signalling ongoing growth and opportunity. Developers and other key stakeholders, including banks and financial institutions, are maintaining a positive outlook,” said Hari Babu, President-NAREDCO.