Sentiments in property market turns pessimistic

Sentiments in the real estate market turned pessimistic during the April-June quarter because of the outbreak of the second wave of Covid-19 pandemic but the future outlook for the next six months remains optimistic, according to a survey by Knight Frank, FICCI and Naredco.

As per the 29th edition of Real Estate Sentiment Index Q2 2021, the sentiment score dropped to 35 in April-June 2021 from 57 in the first quarter of this calendar year. However, it said that the drop is less intense than it was during the first Covid wave when the score had hit an all-time low of 22.

The Future Sentiment score has inched down marginally to 56 in Q2 2021 from 57 in Q1 2021 but continues to remain in the optimistic zone. A score of above 50 indicates 'Optimism' in sentiments, a score of 50 means the sentiment is 'Same' or 'Neutral', while a score below 50 indicates 'Pessimism'.

The survey is of supply side stakeholders including real estate developers, banks and other financial institutions. Knight Frank India CMD Shishir Baijal said, "The tragedy of the second wave of pandemic has pushed the overall industry sentiments down in the second quarter of 2021." A robust vaccination programme along with continued economic activities has been the primary reason for the optimistic future sentiment score, as compared to last year. There is latent demand for both office and residential sectors, albeit hindered by the prolonged pandemic, he added.

The stakeholders' outlook on the office market saw an improvement in Q2 2021 especially with respect to leasing activity. Getamber Anand, Co-Chair, FICCI Real Estate Committee and CMD of ATS Infrastructure, said that the outlook of the realty sector is positive despite the debilitating Covid impact.

Niranjan Hiranandani, National President, NAREDCO and MD of Hiranandani Group said, "The Current Sentiment Index score in Q2 2021 reflects the impact of piecemeal restrictions in April and May followed by easing of curbs in June 2021."

The calibrated reopening of economic activities with accelerated inoculation drive has resulted in an upward trajectory of home buying demand and sales in June on back of stability and security it offers during the deep crisis, he added.