Home News Future real estate sentiment index hit by second Covid wave: Report

Future real estate sentiment index hit by second Covid wave: Report

The second wave of COVID-19 pandemic has influenced future sentiments of real estate stakeholders in the country, says the 28th Edition of Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q1 2021 survey.

In the first quarter of 2021, the future sentiment score declined to 57 from 65 in the same quarter in 2020 due to uncertainties resulting from the spread of a second wave of Covid-19 infections. However, it remained in the optimistic zone. A score of above 50 indicates ‘optimism’ in sentiments, a score of 50 means the sentiment is ‘same’ or ‘neutral’ while a score below 50 indicates ‘pessimism.’

However, the current sentiment score showed a marginal improvement, inching up from 54 in Q4 2020 to 57 in Q1 2021. This improvement can be attributed to the healthy momentum in the commercial and residential real estate segments during Q4 2020 and during January to February 2021.

Similarly, the Q1 2021 outlook of supply side stakeholders reflects caution on the future of real estate for the next six months even if their scores remain in optimistic zone.

With the substantial increase in Covid cases since March, the outlook for residential launches and sales softened in Q1 2021. Even so, the share of respondents that expect the residential market to grow or remain steady in the next six months is more than 80 per cent across parameters of launches, sales and prices.

Similarly, the resultant mobility restrictions and possible lockdowns in some cities has adversely impacted office occupancy levels. This has resulted in weakening of office market outlook for the next six months.

On the macroeconomic front, the pace of economic revival appears to have slowed down with some key economic indicators showing weakening over the last two months. Influenced by the change in macroeconomic developments, stakeholder outlook on overall economic momentum and on credit availability has turned cautious in Q1 2021.

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