According to a report prepared by Knight Frank, FICCI and NAREDCO, sentiments in the real estate sector were at a record low in the first quarter of FY21. The Real Estate Sentiment Index for the quarter showed that stakeholders in the sector, however, expect the market scenario to somewhat improve in the next six months.
The report also says that “the ‘current sentiment’ score has dropped to its lowest levels at 22 in April-June quarter on account of the ongoing COVID-19 global pandemic. The strict lockdown implemented in India had brought around 70 per cent of economic activities to a halt in April-May 2020 and this is reflected in the sharp fall in the current sentiment score.” On the other hand, the survey indicated that the ‘Future Sentiment Score’ of the stakeholders, though still in the pessimistic scoring zone, has seen improvement at 41 in the first quarter of the current financial year against the score of 36 in Jan-March quarter. This is attributed to an expected improvement in macroeconomic indicators and the adaptation to new business models shaping recovery in the next six months.
A score of 50 represents a ‘neutral’ view or status quo, a score above 50 demonstrates a ‘positive’ sentiment and a score below 50 indicates a ‘negative’ sentiment.
This survey, covering the period April-June 2020, was conducted in the first two weeks of July. It covers key supply-side stakeholders which include developers, private equity funds, banks and non-banking financial companies (NBFCs).