Real Estate Sentiment Score Declines Slightly
The latest NAREDCO-Knight Frank Real Estate Sentiment Index for the third quarter of 2024 (July-September) shows that despite a slight decrease in the Current Sentiment Score to 64 (from 65 in Q2 2024), optimism in the real estate sector remains high. The Future Sentiment Score, on the other hand, has increased to 67 from 65 in the previous quarter, indicating growing confidence in the sector’s potential growth over the next six months. Both scores remain positive, reflecting the industry’s overall optimism about its long-term prospects.
In the residential market, 62% of respondents are expecting an increase in residential prices, while 40% anticipate higher sales, and 38% are looking forward to market stability. Likewise, the office market is also looking up, with strong confidence in leasing, supply, and rents, signaling positive momentum in the months to come.
The NAREDCO-Knight Frank Real Estate Sentiment Index gathers insights from developers, financial institutions, and other stakeholders on the real estate sector, economic climate, and funding availability. A score of 50 indicates a neutral outlook, scores above 50 indicate positivity, while scores below 50 suggest a negative outlook.
Developer Future Sentiment Score has risen from 61 in Q2 2024 to 65 in Q3 2024, indicating a renewed sense of optimism among developers who are adjusting to market changes and leveraging ongoing sales.
Meanwhile, the Non-Developer Future Sentiment Score has remained steady at 68 in both Q2 and Q3 2024, reflecting confidence in well-structured real estate projects and the sector’s long-term growth potential.
Hari Babu, President of NAREDCO, commented on the Q3 2024 Real Estate Sentiment Index, emphasizing the sector’s resilience in the face of global uncertainties. Despite a slight dip in the current sentiment score, the industry remains positive, with an uptick in the future sentiment score to 67, indicating stakeholders’ confidence in future prospects.
Looking ahead, 40% of survey respondents predict an increase in residential sales, while 28% expect stability, pointing towards gradual growth in the market. Additionally, 42% believe that residential launches will improve, and 36% foresee stability, with 62% expecting a rise in residential prices driven by consistent demand, especially in the Luxury segment.
The office market outlook is also optimistic, with 76% of respondents anticipating improvements in office leasing, driven by positive corporate sentiment and increasing demand. Furthermore, 47% predict an increase in office supply, reflecting stability and growth in the sector, while 73% foresee a rise in office rents due to the growing demand for high-quality office spaces.
Survey findings also indicate that 46% of respondents expect an improvement in the economic scenario, while 47% anticipate increased funding availability, signaling moderated confidence compared to the previous quarter.
