Hyderabad: With continued economic stress and ambiguity regarding recovery, the current sentiments of the real estate stakeholders in India have been recorded at a low 22 in Q2 2020 (April – June). However, the stakeholders have shown moderate improvement in future sentiments for the next six months, albeit they remain in the pessimism zone.
The 25th Knight Frank – Ficci – Naredco Real Estate Sentiment Index Q2 2020 survey indicated that the ‘Future Sentiment Score’ of the stakeholders has seen improvement at 41 in Q2 2020 against the score of 36 in Q1 2020.
This is attributed to an expected improvement in macroeconomic indicators and the adaptation to new business models shaping recovery in the next six months.
The survey covers stakeholders which include developers, private equity funds, banks and non-banking financial companies. A score of 50 represents a ‘Neutral’ view or status quo; a score above 50 demonstrates a ‘Positive’ sentiment; and a score below 50 indicates a ‘Negative’ sentiment.
Sentiment score of both developers and non-developers in the real estate sector has seen a marginal revival with scores of 39 each in Q2 2020 as compared to Q1 2020. Stalled construction during lockdowns and scarce availability of labour are likely to result in project delays. Tighter lending norms and low demand will take a toll on developer cash flows. In light of such challenges, developer sentiments continue to remain pessimistic for the next six months.
The residential market across new launches, sales and prices continued to be muted in Q2 2020. In terms of the supply of new residential units, 50 percent of the stakeholders opined that the situation for new launches will either improve or remain the same in the next six months. With respect to sales, 31 percent of the stakeholders are of the opinion that residential sales will get better in the next six months. And 49 percent of the respondents feel that prices will weaken further in the next six months, while the remaining 51 percent think that prices will continue to remain around the current levels or increase in the next six months.
In terms of supply, around 46 percent believe that the new office supply will continue to deteriorate in the next six months, whereas 55 percent believe that new supply will either improve or remain stagnant. In the case of leasing activity, 27 percent of the respondents believe that activity on leasing will improve in the next six months, whereas 73 percent believe that it will remain around the same level or worsen. Stakeholders’ outlook with regards to future rental markets improved by a few per cent points where 54 per cent believe that the rental market will be under pressure for the next six months and 46 per cent think that it will be the same or increase in the next six months.
Now you can get handpicked stories from Telangana Today on Telegram everyday. Click the link to subscribe.