Knight Frank-NAREDCO Sentiment Index: India’s Real Estate Sector Remains Positive in Q3 2024 | Representational Image
Mumbai: The 42nd edition of the Knight Frank – NAREDCO Real Estate Sentiment Index for Q3 2024 (July–September 2024) reveals sustained optimism in India’s real estate sector. Despite a slight drop in the Current Sentiment Score from 65 in Q2 to 64 in Q3, the Future Sentiment Score rose to 67 from 65, indicating growing confidence in the sector’s growth over the next six months. Both scores remain firmly positive, reflecting ongoing trust in the industry’s long-term potential.
In the residential market, 62% of respondents anticipate a rise in prices, while 40% foresee increased sales, and 38% expect market stability. The office market also shows a positive outlook, with strong confidence in leasing, supply, and rents, highlighting stakeholder optimism for robust performance in the coming months.
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 funding availability. A score of 50 indicates a neutral outlook, with scores above 50 reflecting positive sentiment and those below 50 suggesting a negative outlook.
The Developer Future Sentiment Score rose from 61 in Q2 2024 to 65 in Q3 2024, indicating renewed optimism among developers. They remain positive, adapting to shifting market dynamics and leveraging ongoing sales momentum.
Meanwhile, the Non-Developer Future Sentiment Score (comprising banks, financial institutions, and PE funds) held steady at 68 in both Q2 and Q3 2024, reflecting confidence in well-structured real estate projects and the sector’s long-term growth prospects.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, commented, “The Q3 2024 Real Estate Sentiment Index highlights the strength of India’s real estate sector. While the Current Sentiment Score moderated slightly, the Future Sentiment Score improved, reflecting growing confidence among stakeholders. Strong demand in high-end residential sales and stable leasing in commercial spaces underscore the sector’s steady performance. Supported by stable economic fundamentals and favourable market dynamics, the sector is well-positioned for sustained growth and continued opportunities.”
Optimism prevails in the residential market. In this quarter’s survey, 40% of respondents expect residential sales to increase, and 28% predict stability, indicating steady confidence in the market. Additionally, 42% of respondents believe residential launches will improve, while 36% foresee stability.
Moreover, 62% anticipate residential prices to rise, driven by consistent demand, particularly in the luxury segment with ticket sizes of Rs 10 million and above.
Hari Babu, President of NAREDCO, said, “The Q3 2024 Real Estate Sentiment Index reflects the Indian real estate sector’s resilience amidst global uncertainties. Despite a marginal dip in the current sentiment score, the sector remains optimistic. The uptick in the future sentiment score to 67 is a testament to stakeholders’ confidence in the sector’s prospects. The RBI’s GDP growth projection of 7.2% for FY 2024-25 and the stable interest rate environment will further boost investor sentiment. Developers are particularly optimistic, with their future sentiment score rising to 65. As the sector continues to grow, it’s essential that we address existing challenges and leverage opportunities for sustainable growth.”
The office market outlook for Q3 2024 reflects strong confidence, with 76% of respondents expecting office leasing to improve, driven by positive corporate sentiment and a sustained recovery in demand.
Additionally, 47% predict an increase in office supply, highlighting stability and continued growth in the sector. Confidence extends to rental performance, with 73% of respondents anticipating a rise in office rents, fuelled by increasing demand for high-quality office spaces.
Survey findings show that 46% of respondents expect an improvement in the economic scenario, reflecting softened optimism about India’s economic resilience and potential growth. Additionally, 47% anticipate increased funding availability, demonstrating moderated confidence compared to 51% in the previous quarter.
