For Realty, Some­thing to Cheer

Real es­tate sen­ti­ment in­dex for Jan­uary-March 2016 rose to 53 from 48 in the pre­vi­ous quar­ter on the back of Union Bud­get’s fo­cus on real es­tate and in­fras­truc­ture and with the Realty Bill be­com­ing an Act

The Economic Times - - Companies: Pursuit Of Profit - Rav­iTeja.Sharma@times­

New Delhi: Af­ter five slow quar­ters, sen­ti­ment in the do­mes­tic real es­tate in­dus­try is turn­ing pos­i­tive, ac­cord­ing to a re­port by in­dus­try body FICCI and prop­erty ad­vi­sory firm Knight Frank In­dia.

The Real Es­tate Sen­ti­ment In­dex for the Jan­uary-March 2016 pe­riod has risen to 53 from 48 in the pre­vi­ous quar­ter af­ter hit­ting a peak of 63 in the July-Septem­ber quar­ter of 2014 af­ter the new gov­ern­ment was sworn in at the cen­tre.

The fu­ture sen­ti­ment in­dex, how­ever, has jumped nine points to 67 in the Jan­uary-March pe­riod from 58 in the pre­vi­ous quar­ter, in­di­cat­ing a re­vival in stake­holder sen­ti­ment.


Ac­cord­ing to Das, stake­hold­ers have been op­ti­mistic about the of­fice leas­ing mar­ket for some time now. “Res­i­den­tial sec­tor, on the other hand, has re­stored pos­i­tive sen­ti­ment among the de­vel­op­ers and lenders for the first time af­ter four quar­ters,” he said.

Apart from the Real Es­tate Reg­u­la­tion Bill be­com­ing an Act, pro­gres­sively re­duc­ing in­ter­est rates and an im­prov­ing fund­ing sce­nario with the im­mi­nent en­try of REITs in the mar­ket are also ex­pected to help the real es­tate sec­tor.

Ac­cord­ing to the re­port, the north­ern zone wit­nessed a sub­stan­tial re­cov­ery in the fu­ture sen­ti­ment score.

The re­port, re­leased on Fri­day, said: “The lower in­ter­est rate regime is also a big pos­i­tive point for the de­vel­oper fra­ter­nity. Ad­di­tion­ally, the Re­serve Bank has hinted fur­ther rate cuts if in­fla­tion con­tin­ues to ease and mon­soon turns out to be good.”

How­ever, de­spite the find­ings of the re­port, fi­nan­cial in­sti­tu­tions are still cau­tious. About 68% of those queried for the sur­vey said the fund­ing sce­nario will be­come bet­ter go­ing for­ward.

On the res­i­den­tial front, the pres­sure on un­sold in­ven­tory has been re­duc­ing since the last four quar­ters due to the lim­ited num­ber of new launches. The re­port said de­vel­op­ers have been fo­cus­ing on project com­ple­tions, in­still­ing con­fi­dence in buy­ers.

Stake­hold­ers in the in­dus­try are quite op­ti­mistic about res­i­den­tial sales — nearly 54% of the re­spon­dents said de­mand will pick up in the com­ing six months.

About 46% of the re­spon­dents said res­i­den­tial launches will im­prove while 41% said res­i­den­tial price ap­pre­ci­a­tion will be­come bet­ter in the next six months. About 63% of the re­spon­dents said new of­fice sup­ply will im­prove while 73% said leas­ing volume will rise.

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