India's beleagured real estate industry may still be down in the dumps, but hope does spring eternal. The latest real estate sentiment index survey reveals that after remaining in the pessimistic zone (below 50-mark) for the last six months, it is currently on a revival.
Sentiments for January to March quarter show that real estate stakeholders are at an optimistic level of 53. Anything above 50 is considered positive. Future sentiment score, which had fallen in the previous quarter has bounced back to 59 for the present period. It was below 50, at 49, in the last quarter.
“Future outlook is positive,” said Rajini Shah, chief economist and national director of real estate consultant Knight Frank, which had done the Real Estate Sentiment Index for the National Real Estate Development Council (Naredco), an industry body under the aegis of the housing and urban development ministry, as well as FICCI. However, she hastened to add, “Real estate stakeholders are pretty cautious... It is still early to see if this growth momentum will be sustained.”
The Centre's decision to create an Alternate Investment Fund of Rs 25,000 crore for the ailing sector, the rationalisation of GST and the cutting of lending rates by 135 basis points in recent months by the RBI are some of the factors that has helped the sector to look ahead with hope, experts point out. On the economy front also, revival in certain sectors like cement as well as the uptick in the PMI data released last month have been encouraging.
It is still a mixed bag, with home sales still remaining bleak, even as the office space sale and lease/rental has had a dream run last year. While almost half the stakeholders in the office space segment feel prices there will go up, as much as 70 per cent in the residential segment felt prices will remain same, or will only go down.