Survey Suggests That Real Estate Sentiments Have Plummeted To An All Time Low

The real estate industry is perhaps going through its worst phase with industry sentiments continuing to slip for the second quarter in a row during the 2020 calendar year. After hitting a historic low in Q1, the sentiment further went south during April-June mirroring the domestic and global economic concerns, a survey report said.

The Knight Frank-Ficci-Naredco real estate sentiment index Q22020 survey shows that current sentiments of real estate stakeholders have nosedived to an all-time low of 22. This is against the earlier low of 31 during January-March 2020. The survey was conducted in the first two weeks of July. For comparison, a score of more than 50 signifies ‘optimism’ in sentiments, while 50 means the sentiment is ‘same’ or ‘neutral’, and a score below 50 signifies ‘pessimism’.

Though industry sentiment is at its lowest, however the report noted that stakeholders have shown moderate improvement in future sentiments for the next 6 months, but they remain in the pessimism zone. “Future sentiment score of stakeholders, though still in the pessimistic scoring zone, has seen improvement at 41 in Q22020 against the score of 36 in Q12020. 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 report added.

The survey covers key supply-side stakeholders including developers, private equity funds, banks and non-banking financial companies (NBFCs).

Knight Frank India chairman & MD Shishir Baijal said, “With some macroeconomic indicators showing marginal improvement and with the impending festive season in second half of the year, stakeholders have shown improved sentiments compared to the previous quarter, albeit they have remained in the pessimistic zone. At this juncture, we expect the lockdown to ease by the advent of the festive season, helping to revive economic activity and propel conversion of the pent- up demand”.

For real estate in particular, there is a need for measures like additional tax benefits for buying or renting a house, added incentives for affordable housing, easing of credit availability for the sector and a one-time restructuring of developer loans to help the sector recover from this crisis, he added.

(Source: Financial Express)