Real Estate Market Sentiment Up In Q3FY21

A pick-up in the pace of vaccinations has helped address the fear of a third COVID-19 wave to a great extent. Coupled with better preparedness to handle the pandemic, bouncing back after the lockdowns is becoming the norm of the day leading to the real estate sentiment index increasing to 63 in Q3 2021 after the dismal score of 35 recorded in Q2 2021. The Future Sentiment Index score rose from 56 in Q2 2021 to 72 in Q3 2021, which is also the highest ever in the history of the Index. The Future Sentiment score for West Zone has increased from 60 in Q2 2021 to 67 in Q3 2021. For the North Zone, the score has increased from 55 in Q2 2021 to 63 in Q3 2021. The office sector also recorded a YoY rise of 168 percent in office leasing activities recording a total of 12.5 million square feet (msf) of office absorption. The residential sector also continued its forward pace with top markets recording sales of 64,010 units in July to September quarter, a rise of 92 percent year-on-year (YoY). The Real Estate Sentiment Index is based on a quarterly survey of key supply side stakeholders which include developers and non-developers, i.e. financial institutions including banks, Non-Banking Financial Companies (NBFCs) and private equity (PE) funds. The survey comprises questions pertaining to the overall economic momentum, funding availability, project launches, sales volume, leasing volume, prices and rents. 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’.  In Q3 2021, the optimism for residential market outlook also strengthened with 89 percent of the survey respondents expecting residential sales to increase in the next six months. This is a sharp increase from the 64 percent respondents who held this opinion in Q2 2021.