The retail sentiment on the real estate sector has improved significantly in the third quarter of 2020, according to the 26th Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q3 2020 Survey. In Q3 2020, the Current Sentiment score has jumped up to 40 from a record low of 22 in Q2 2020. However, the Current Sentiment score had turned negative in Q1 2020 after the COVID-19 outbreak, recording a score of 31. As the impact of the pandemic and the stringent lockdowns on businesses became more apparent in the following months, market sentiments spiralled down further, resulting in an all-time low score of 22 in Q2 2020. Q3 2020 has seen a partial restoration of business activity and improvement in the economic health and this has in turn improved the sentiments for the real estate sector.
But the Future Sentiment score takes into account stakeholder outlook of the real estate sector for the coming six months. The Future Sentiment score has climbed up to 52 in Q3 2020, from 41 in Q2 2020, moving into the optimistic zone after staying in the pessimistic zone for two consecutive quarters. The July-September 2020 quarter has seen considerable improvement in real estate business activity. Residential launches and sales, across cities, bounced back from the COVID-induced decline with gusto. Offices have resumed operations at varying occupancies across markets and have been taking steps to ensure continuity in business operations to their highest potential. The economy at large has also seen improvement as evidenced across key macroeconomic indicators such as the Manufacturing and Services Purchasing Managers’ Index (PMI), auto sales, power consumption and Goods and Services Tax (GST) collections.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, said that the July-September 2020 quarter was a welcome surprise as the resilient residential real estate market bounced back with full gusto. Both sales and launches gathered momentum, rebooting the business cycle. Residential sales were supported by low home loan interest rates, discounted prices and government incentives. The office market also saw a revival of business activity as offices re-opened and adopted measures that ensure business continuity. All these developments have set the tone for a gradual restoration of business and created strong hopes of recovery in the coming months.