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Real estate sentiment score dips in Q4 on bleak global economic scenario

Future Sentiment Score notches up in optimistic zone: Knight Frank-NAREDCO Real Estate Sentiment Index Q4 2022

The sentiment score for the real estate sector has dropped from 61 in Q3 2022 to 59 in Q4 2022, mainly because of bleak global economic scenario and geopolitical risks from the Russia-Ukraine war, according to the 35th edition of the Knight Frank-NAREDCO Real Estate Sentiment Index Q4 2022 (October - December 2022).

The resilience of the Indian economy and that of the real estate industry have influenced an upward movement in the Future Sentiment Score.  The Future Sentiment Score has increased from 57 in Q3 of 2022 to 58 in Q4 of 2022.

The sentiment index is based on a survey of supply-side stakeholders like developers, investors and financial institutions. A score of above 50 indicates 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral'. A score below 50 indicates 'pessimism'.

The Developer Future Sentiment Score – representing the market expectations for the upcoming six months (till March 2023), has scaled up from 53 in Q3 2022 to 62 in Q4. Despite increasing mortgage rates owing to the 225-basis point hike in repo rates, the sustained momentum in residential sales has boosted developer sentiments for the next six months. The Future Sentiment Score captures the stakeholder sentiments for the next six months for the real estate sector.