Mumbai: The sentiment towards real estate has taken a hit, due to the economic slowdown that the global economy is faced with. This has been reflected in the latest edition of Knight Frank-NAREDCO Real Estate Sentiment Index Q3 2022 (July - September 2022.
According to the report released on Thursday, the current sentiment score has declined marginally from 62 in Q2 2022 to 61 in Q3 2022 on account of the economic scenario playing out globally.
It has gone down primarily because of the gloomy global economy and the current geopolitical risk due to the Russia-Ukraine war. Although it has declined marginally, it still shows optimism since the perception of the Indian economy and the real estate remains resilient thus far.
The Future Sentiment Score, which measures stakeholder perceptions for the real estate sector over the next six months, has decreased from 62 in Q2 2022 to 57 in Q3 2022.
As inflation remains high in India, tightening monetary policy measures and an adjusted economic growth forecast have altered the stakeholder sentiment for the next six months.
Both the Current and Future Sentiment Scores have remained mild despite the fall. The Current Sentiment Index score and the Future Sentiment score have moderated in Q3 2022 as stakeholders exercise caution as the impact of the global economic headwinds on the Indian economy is yet to play out. Additionally, housing affordability has shrunk further after the repo rate hike in September 2022.
The volume of residential sales and launches which have declined sequentially from Q2 2022 to Q3 2022, are likely to shrink further in Q4 2022 on both parameters. This is not surprising, as the impact of the cumulative repo rate hike of 190 basis points is yet to be passed on fully to homebuyers, the festive period discounts on home loans will no longer be available after October 2022, and the geopolitical tensions and inflationary risks will continue to persist in the foreseeable future.
Earlier this month, the Free Press Journal had reported how home developers are trying to package sales with freebies such as free electric bikes, free furniture, stamp duty and GST waiver, furniture, home appliances, among others.
