Real estate developers, banks, financial institutions and private equity funds remain positive about the sector’s long-term growth prospects. As developers adapt to changing market dynamics and capitalize on current sales momentum, the non-developer segment exudes confidence in well-structured real estate projects, according to a Knight Frank sentiment index and Naredco.

The outlook for the residential market remains optimistic. This quarter, 40% of respondents expect residential sales to increase and 28% expect stability. Up to 62% expect prices to increase. This demonstrates continued confidence in the market, with general sentiment pointing towards gradual growth, according to the Real estate sentiment index Q3 2024 (July-September 2024).

The Developer Future Sentiment Score increased from 61 in Q2 2024 to 65 in Q3 2024, indicating renewed optimism. Developers remain positive, adapting to changing market dynamics and capitalizing on current sales momentum.

Meanwhile, the future sentiment score of non-developers (comprising banks, financial institutions and PE funds) maintains the status quo at 68 until the second and third quarters of 2024, reflecting their confidence in real estate projects well structured and the long-term growth prospects of the sector.

Likewise, the outlook for the office market is buoyant, with strong confidence in key metrics such as leasing, supply and rents, underscoring stakeholder optimism for strong performance in the months ahead. come. According to the survey, 76% of respondents expect office leasing to improve, driven by positive business sentiment and a sustained recovery in demand. Additionally, 47% anticipate an increase in office supply, highlighting the stability and continued growth of the sector.

This confidence extends to rental performance, with 73% of respondents anticipating an increase in office rents, fueled by growing demand for high-quality office space. These results underline the resilience and growth trajectory of the Indian office market, supported by a favorable economic environment and changing business demands.

What does the sentiment index capture?

The Knight Frank – NAREDCO Real Estate Sentiment Index captures the perceptions of supply-side stakeholders and financial institutions regarding the real estate sector, economic climate and availability of financing.

A score of 50 indicates a neutral outlook; scores above 50 reflect a positive sentiment, while those below 50 suggest a negative outlook.

There was a marginal drop in current sentiment scorewhich amounts to 64, compared to 65 for the April-June period. However, the Future Sentiment Score improved to 67, from 65 in the previous quarter, signaling growing confidence in the sector’s growth over the next six months, the report said.

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“The Real Estate Sentiment Index for Q3 2024 highlights the strength of the Indian real estate sector. While the current sentiment score moderated slightly, the future sentiment score improved, reflecting growing stakeholder confidence. Strong demand for high-end residential sales and stable commercial space rentals underline the consistent performance of the sector,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.