Track2Realty: Knight Frank India in association with the Federation of Indian Chambers of Commerce & Industry (FICCI) has released the fifth set of findings of its flagship report – The Real Estate Sentiment Index for Q4 2014 October – December). The latest edition has captured the current sentiments of the supply side stakeholders, six months after the new government being elected to power.
Key Takeaways:-
· Stakeholder sentiments across all zones have witnessed a major dip during Q4 2014
· Delays in the execution of GST, the insurance bill and a soft stance on cutting interest rates have led to the drop
· Subdued festive sales have dented future sentiment levels of developers
· Investor confidence has taken a hit owing to oversupply within the residential space
· Number of stakeholders expecting a price hike have also reduced by over 50% in Q4 2014 compared to the preceding period
· Financial institutions continue holding steady with their positive outlook over the past three quarters
Knight Frank maintains that though the Indian economic story seems to be heading in the right direction post the change of guard in the government, the five point drop in the future Sentiment Index levels definitely indicates a rationalisation in stakeholder expectations regarding the pace at which changes will be brought about in the country.
The residential market has disappointed stakeholders with sentiments witnessing a sustained fall relative to the launches and absorption over the past three reference periods. Increasing illiquidity caused by dipping transaction numbers and delayed economic revival have weighed down the market. However, sentiments are still positive for the first half of 2015 and it remains to be seen how things pan out as reducing inflationary pressures and policy implementation help revive the economy.
The office market on other hand has been in line with our expectations with uptake happening across all regions. Relocation and consolidation of office spaces have been the major drivers of this segment with majority of the contribution coming from the outsourcing industry. Unlike the residential segment, vacancy levels within premium office buildings across prime locations have been consistently reducing with chances of a further drop in the near future.
