Real estate developers, private equity funds, banks and non-banking financial companies continue to be optimistic about growth in realty sector in the coming quarter, a survey, conducted in the April-June quarter by consultancy Knight Frank India and the Federation of Indian Chambers of Commerce and Industry (FICCI) revealed.
The real estate sentiment index for the quarter stood at 68, it found, marginally up from 67 in the quarter ended in March. A score above 50 denotes positive sentiment and one below 50 suggests negative sentiment. A score of 50 suggests that respondents have a neutral outlook for the next quarter.
“More than 95 per cent of the respondents feel that the sales volume will either be at the same level or improve in the next six months,” a report detailing the survey findings stated. Residential prices are unlikely to be impacted by the expected rise in sales, most respondents felt.
“Despite an expectation of a better sales scenario in the future, the stakeholders feel that the residential prices will remain muted. More than 60 per cent of the survey respondents feel that the residential price appreciation will remain the same or worsen by the end of the year,” the report stated.
Fifty five per cent of respondents believe that the funding scenario for realty projects will also improve in the next six-month period. Leasing volumes of commercial projects are likely to improve, 60 per cent of the respondents said.
The supply of office spaces, however, is expected to come under pressure, resulting in a rise in rental costs. “Majority of the respondents felt that office space rental growth will strengthen by the end of 2016,” the report stated.