Knight Frank India along with FICCI and NAREDCO has unveiled its Real Estate Sentiment report for April - June quarter of 2017. The report states that the current sentiments on the sector had been positive, which in the last quarter have moved in the negative zone for the first time since Q4 2015. The dip in sentiments is largely a result of ambiguity over policy issues, especially the implementation of the Real Estate Regulation and Development (RERA) Act, 2016 in some states and the Goods and Services Act (GST). According to the report the dip in sentiments is transient in nature. Going forward when clarity on policy issues come in, it’s positive impact should get reflected in the sentiments of the shareholders. This positivity is apparent in the future sentiments of stakeholders which is positive but not bullish
The report said that the “wait and watch mode” is still prevailing in the sector in the expectation of clarity on various policy measures by the government in the next six months.
The future sentiments however, are positive but not bullish. This positivity stems from the fact that stakeholders expect clarity, on policy issues, to come in the next six months.
In contrast to the lacklustre sentiments on residential sales, 59% of the respondents have opined that there will be an upward pressure on residential prices in the coming six months due to factors such as an increase in compliance costs due to implementation of new policies. In the office market, the lack of supply will lead to an upward pressure on rentals with nearly 86% of the respondents believing that office rentals will either remain the same or move up in the coming six months, added the report.
All the zones look upbeat with the future sentiment score. The fact that many states have modified their RERA rules as per the local dynamics has given a positive impetus to sentiments among stakeholders from the supply side of the real estate market.
