The latest Knight Frank – NAREDCO Real Estate Sentiment Index reveals a slight decline in current and future sentiment scores for Q4 2024. Despite remaining above the optimistic threshold, the scores reflect growing concerns over global economic conditions. Key findings include:
- Current sentiment index drops to 59 from 64 in Q3 2024.
- 54% of stakeholders express a positive outlook for India’s economy.
Current Sentiment Scores Reflect Economic Challenges
The current sentiment score for the real estate sector has dipped to 59 in Q4 2024, down from 64 in the previous quarter. This adjustment is attributed to global economic fluctuations and concerns about the pace of economic growth. As explained by Shishir Baijal, Chairman and Managing Director of Knight Frank India, “The downward correction in sentiment scores indicates a measured response to current economic challenges, yet the overall sentiment remains optimistic.” The future sentiment score has also seen a decline, settling at 59 compared to 67 in Q3 2024. Despite these fluctuations, the scores remain in the optimistic range, highlighting sustained confidence in the sector’s long-term prospects.
Residential Market Outlook Sustains Optimism
In Q4 2024, the residential market outlook continues to show promise, with 59% of stakeholders anticipating a rise in residential prices. Furthermore, 38% expect an increase in sales, while 41% foresee a boost in residential launches. However, the anticipation of new launches has moderated, with 32% of respondents now predicting a decline in new launches for the first half of CY 2025. This represents a significant shift from just 4% in Q4 2023. “The residential market shows resilience, but we must remain vigilant about potential headwinds,” noted Ramesh Nair, CEO of JLL India. The office market outlook is also positive, with stakeholders expressing confidence in leasing, supply, and rental performance over the next six months.
Economic Sentiment and Funding Availability in Focus
According to the survey, only 54% of respondents maintain a positive outlook on the economic scenario, a stark drop from 90% in Q4 2023. The moderation in sentiment is largely due to recent downward GDP revisions and macroeconomic challenges. Additionally, 39% of participants anticipate an increase in funding availability, down from 57% in the previous quarter. The percentage of respondents expecting a decrease in funding has also risen to 12%, indicating a shift in investor sentiment towards caution.
Overall, the Knight Frank – NAREDCO survey highlights the need for stakeholders to navigate the evolving economic landscape with a balanced approach. As industry experts suggest, a vigilant yet optimistic stance will be crucial in harnessing potential opportunities while addressing emerging challenges.
