The residential real estate section has recorded robust recovery throughout cities put up the onset of the pandemic. Driven by the heightened want for house possession, residential gross sales have gained momentum throughout ticket-sizes during the last year. Reflecting this constructive efficiency, stakeholder outlook for the residential real estate section has been recording a constructive outlook because the previous few quarters. This optimism was solely barely mellowed in Q2 2021 because of the second COVID wave exigencies, in response to the twenty ninth Edition of Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q2 2021 (April – June 2021).
As per the survey, the future sentiments of real estate sector stakeholders remained optimistic in Q2 2021 regardless of the second wave of COVID-19 that struck throughout this era. Further, the stakeholders’ response to the second pandemic wave was not as extreme because it was throughout the first wave as indicated by the comparatively lesser drop in sentiment scores in Q2 2021.
The Current Sentiment rating has dropped from 57 in Q1 2021 to 35 in Q2 2021, but the drop is much less intense than it was throughout the first COVID wave (Q2 2020) when the rating had hit an all-time low of twenty-two. The Future Sentiment rating has inched down marginally from 57 in Q1 2021 to 56 in Q2 2021, persevering with to remain within the optimistic zone. Here as properly, the outlook of stakeholders displays extra resilience in Q2 2021 than in Q2 2020.
Market sentiments had been severely hit by the second COVID wave which began in March 2021. While a nationwide lockdown was averted this time, all states went by way of phases of partial to finish lockdowns throughout March to June 2021. This impacted financial exercise of each residential and office real estate segments as has been captured by the autumn within the Current Sentiment rating for this quarter.
In phrases of geography, the West zone noticed the sharpest recovery within the Future Sentiment Score. This zone’s Future Sentiment rating jumped from 53 in Q1 2021 to 60 in Q2 2021. With the resumption of financial exercise, future sentiments (for the following six months) of stakeholders have remained within the optimistic zone, throughout most areas.
Stakeholder outlook on office market noticed an enchancment in Q2 2021 particularly with respect to leasing exercise. In Q2 2021, 40% of survey respondents had been of the opinion that office leasing exercise would improve over the following six months, up from 34% final quarter. Around 21% of the Q2 2021 survey respondents, up from 15% in Q1 2021, expects office rents to extend within the subsequent six months whereas 40% count on rents to remain steady.
The optimism in residential market outlook has continued in Q2 2021. More than 50% of the Q2 2021 survey respondents proceed to count on a rise in residential launches and gross sales within the coming six months.
On the macroeconomic entrance, greater than 80% of the Q2 2021 survey respondents proceed to have an optimistic outlook for the financial system within the coming six months. While on the credit score availability entrance, stakeholder outlook has improved in Q2 2021 with 46% respondents – up from 41% in Q1 2021 – anticipating a rise within the coming six months.
Commenting on the identical, Shishir Baijal, Chairman and Managing Director, Knight Frank India, stated, “The tragedy of the second wave of pandemic has pushed the overall industry sentiments down in the second quarter of 2021. However, our learning from the first wave, as well as a less stringent lockdown in the second wave, have equipped us well to mitigate the severity of the economic ramification, showing some level of positive outlook among the stakeholders when compared to the dead low sentiment score of 22 during the same period last year.”
“The availability of vaccines, a robust vaccination programme, along with continued economic activities have been the primary reason for the optimistic future sentiment score, as compared to last year. The real estate sector is treading cautiously and acknowledges that there is latent demand for both office and residential sectors, albeit hindered by the prolonged pandemic,” he added.