2023-05-10-莱坊-REAL_ESTATE_SENTIMENT_INDEX_Q3_JULY_-_SEPTEMBER_2022_12页_1mb

Real Estate Sentiment Index Summary - Q3 2022

Core Content

The Knight Frank-NAREDCO Real Estate Sentiment Index for Q3 2022 (July-September 2022) is a quarterly report that captures the perceptions and expectations of key supply-side stakeholders in the Indian real estate sector. It is jointly developed by Knight Frank India and the National Real Estate Development Council (NAREDCO), aiming to provide insights into the current and future sentiment of the market, the economic climate, and funding availability.

Main Objectives

• To measure the sentiment of the real estate market by analyzing the views of developers and non-developers (including banks, financial institutions, and private equity funds).
• To gauge the impact of global economic conditions and geopolitical risks on the Indian real estate sector.
• To provide a forecast for the next six months based on stakeholder expectations.

Key Findings

Overall Sentiment

• Current Sentiment Score: 61 (down from 62 in Q2 2022), indicating a slight moderation due to global economic uncertainty and geopolitical risks.
• Future Sentiment Score: 57 (down from 62 in Q2 2022), reflecting a more cautious outlook as global recession forecasts and high inflation affect stakeholder confidence.
• The overall sentiment remains optimistic, with both indices above 50, suggesting that the real estate sector is still resilient.

Zonal Future Sentiment Scores

• All zones experienced a decline in Future Sentiment scores, with the North Zone dropping from 66 to 62, the West Zone from 59 to 58, and the South Zone from 66 to 60.
• Stakeholders remain optimistic about the continuity of real estate demand and supply, despite the downward trend in zonal scores.

Stakeholder Sentiment

• Developers: Future Sentiment score declined from 61 to 53, mainly due to concerns over rising home loan rates (up by 70-100 basis points) and affordability issues.
• Non-Developers: Future Sentiment score decreased from 64 to 60, with institutional investors remaining cautious about the next six months.

Residential Market Outlook

• Residential Sales: 44% of respondents expect an increase in the next six months, up from 24% in Q2 2022.
• Residential Launches: 76% of stakeholders expect either an increase or stability in supply, similar to Q2 2022.
• Residential Prices: 41% of respondents anticipate price increases, up from 34% in Q2 2022.
• Residential Market Momentum: The Future Sentiment Index suggests a reduction in momentum for Q4 2022, with a projected 28% sequential decline in both sales and launches.

Office Market Outlook

• Office Leasing: 44% of respondents expect continued growth, up from 29% in Q2 2022.
• Office Supply: 48% of stakeholders anticipate an improvement, up from 31% in Q2 2022.
• Office Rents: 53% of respondents expect rent increases, up from 43% in Q2 2022.
• The office market is showing buoyancy with stable or increasing rents and improved leasing volumes.

Economic Scenario and Funding Availability

• Overall Economic Momentum: Stakeholders expect economic momentum to remain stable, despite global uncertainties.
• Funding Availability: 42% of respondents expect funding availability to remain the same, while 37% anticipate improvement.
• The Indian economy is expected to grow robustly in 2023, even as global growth slows.

Methodology

• The index is based on a quarterly survey of key supply-side stakeholders.
• Respondents are asked to rate their expectations on various aspects including economic momentum, funding availability, project launches, sales volume, leasing volume, prices, and rents.
• Scores are assigned as follows:
  • Increase/Increased: 100 points
  • Somewhat Increase/Somewhat Increased: 75 points
  • Same: 50 points
  • Somewhat Decrease/Somewhat Decreased: 25 points
  • Decrease/Decreased: 0 points
• A score above 50 indicates optimism, 50 is neutral, and below 50 is pessimism.

Correlation with Market Indicators

• The Future Sentiment Score has a high correlation with residential sales and launches.
• Correlation values:
  • Residential Sales: 0.77
  • Residential Launches: 0.82
• 65% variation in residential launches and 62% variation in sales can be attributed to the Future Sentiment Score, highlighting its predictive power.

Conclusion

• Despite global economic contraction and rising inflation, India's real estate sector remains resilient and continues to perform better than many global economies.
• The Future Sentiment Index suggests a potential slowdown in Q4 2022, particularly in the residential market, due to factors like high interest rates and reduced festive discounts.
• The office market, however, is showing strong growth with increased leasing activity and stable or rising rents.
• The report emphasizes the importance of proactive monetary policy and control over inflation for a faster and stronger recovery in the Indian real estate market.

About the Partners

• Knight Frank India: Headquartered in Mumbai, it has over 1,400 experts across major cities in India. It provides comprehensive real estate services including advisory, valuation, consulting, and project management.
• NAREDCO: Established in 1998, it is an autonomous self-regulatory body under the Ministry of Housing and Urban Affairs. It aims to promote transparency, ethics, and growth in the real estate sector through collaboration with industry and government.

Contact Information

• Vivek Rathi: Director - Research, Knight Frank India
  Email: vivek.rathi@in.knightfrank.com

• Divya Agarwal: Vice President - Research, Knight Frank India
  Email: divya.agarwal@in.knightfrank.com

• NAREDCO:
  Website: www.naredco.in
  Contact: naredco@naredco.in

• Alok Gupta: Director General - NAREDCO
  Email: naredco@naredco.in

Disclaimer

• The report is based on the "as is, where is" basis and does not constitute a guarantee or assurance.
• Stakeholders are advised to conduct their own due diligence.
• Knight Frank (India) Pvt. Ltd. disclaims all implied warranties and liabilities related to the use of the report.