The 37th edition of the Knight Frank-NAREDCO Real Estate Sentiment Index Q2 2023 (April-June) report cited that the Current Sentiment Score scaled up from the previous quarter’s 57 to 63, in the optimistic zone. This is due to the continued resilience of the Indian economy amid a recessionary environment globally. The Current Sentiment Score signifies stakeholders’ current outlook in comparison to the preceding six months.
During Q2 2023, the Future Sentiment Score rose from 61 in Q1 2023 to 64 in the optimistic territory as India’s macroeconomic indicators remained firm, despite headwinds on some parameters.
The Developer Future Sentiment score has increased from 61 in Q1 2023 to 65 in Q2 2023. With a momentary pause in interest rate hikes by the Reserve Bank of India (RBI), real estate developers remain optimistic about the next six months as the underlying demand for real estate remains firm.
The Non-Developer (the segment which includes banks, financial institutions, and PE funds) Future Sentiment score increased from 61 in Q1 2023 to 62 in Q2 2023. The institutional investors, who remained watchful in the past periods, indicated enhanced confidence in the Indian economy. The pause in the interest rate hike cycle by the RBI also influenced them positively.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “Amidst turbulent global developments, India's economy has firmly positioned itself as one of the world's fastest-growing large economies, which has significantly influenced stakeholders' sentiments in Q2 2023. As a result, the Current Sentiment Index Score surged from 57 in the previous quarter to 63. Despite facing high inflation in developed markets, the Indian economy demonstrated resilience and bounced back, instilling confidence in stakeholders regarding the stability of the domestic economic climate and real estate sector performance over the next six months.”
“Even though retail inflation experienced a temporary spike from 4.25% in May to 4.81% in June 2023, it remains within the RBI's acceptable tolerance band of 2-6%. The Future Sentiment Score therefore continued its positive trend, climbing from 61 in Q1 2023 to 64 in Q2 2023, mainly because the policy environment continues to support economic growth.” He added.
Rajan Bandelkar, President of NAREDCO and Managing Director of Raunak Group, said, “The bounce back of the Indian economy, coupled with inflation within the RBI’s tolerance band, has instilled confidence among stakeholders in the domestic economic climate and the real estate sector's performance for the next six months. The Future Sentiment Score also witnessed an increase, thanks to stakeholder optimism regarding the Indian economy's trajectory and the sustained demand in the real estate sector. While zonal scores surged in all zones except the South, where caution prevails, the overall scores for all regions remained firm in the optimistic zone. This signifies a greater sense of confidence in the performance of these markets in the upcoming six months.”
