Real estate sentiment cautiously optimistic, says report

Balanced outlook ahead as real estate sentiment shows cautious optimism: Report

The real estate stakeholders in the country remain cautiously optimistic amid global economic shifts and growth worries but the sentiment has turned modest from the previous quarter, the Knight Frank–NAREDCO Real Estate Sentiment Index has said.

While there is cautious optimism in the residential sector, the outlook for office market remain buoyant.

The quarterly Knight Frank-NAREDCO report captures the current and future sentiments towards the real estate sector, economic conditions and funding availability, as perceived by the supply-side stakeholders and financial institutions.

Both current and future sentiment scores remain above the optimistic threshold of 50 but have dipped from the previous quarter, the report for the October–December 2024 period, which was released on March 3, said.

The current sentiment index score declined to 59 in from 64 in the previous quarter, indicating a measured adjustment.

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A score of 50 represents a neutral view or status quo, above 50 a positive sentiment and a score below 50 indicates a negative sentiment.

Amid a cautiously optimistic global economic outlook for 2025, the real estate sector reflects a nuanced blend of resilience and tempered growth, where emerging opportunities coexist with evolving challenges, Knight Frank India chairman and managing director Shishir Baijal said.

“As we navigate these dynamic times, it is crucial to understand the shifts in sentiment, enabling stakeholders to make informed decisions for a prosperous future,” he said.

The residential market outlook remains positive, with a 59 percent response rate for an expected rise in prices, while 38 percent stakeholders anticipate an increase in sales. Around 41 percent expect a rise in residential launches while 28 percent indicate stability.

National Real Estate Development Council  (NAREDCO) president Hari Babu said the Q4 2024 Sentiment Index report highlights cautious optimism in the residential sector, with stakeholders adopting a more measured approach.

“The moderation in residential launches, sales, and prices is a reflection of the prevailing economic and market conditions. We must focus on creating sustainable and affordable housing options that cater to the evolving needs of homebuyers. Despite the short-term challenges, we remain optimistic about the long-term prospects of the Indian real estate sector,” he said.

The office market outlook exhibits buoyancy on all key parameters — leasing, supply and rent - as the stakeholders remain confident about the performance of this asset class in the next six months, the report said.