Realty Players Stay Upbeat in Resilient Economy

Stakeholders in the real estate industry such as developers, financiers, and institutional investors, are confident about the business outlook for the next six months, backed by a resilient Indian economy and sustained domestic demand despite global recessionary conditions.

Both present and anticipated sentiments regarding the realty sector, economic conditions, and funding availability point towards an optimistic and favourable business environment.

The current sentiment index score stayed firmly in the optimistic zone, rising to 69 from last quarter’s 59. This increase is attributed to the economy continuing its growth trajectory, due to timely interventions by the central bank.

“The real estate sector has witnessed a notable phase of growth in recent quarters, with all major segments, including residential, office space, industrial, warehousing, and retail, demonstrating consistent progress. This growth  is underpinned by the country’s  stable economic outlook, corroborated by various agencies assessing indicators such as historical performance, ongoing investments, and prospects, all of whom have expressed optimism regarding India’s economic growth trajectory,” reported Knight Frank India.

In 2023 residential sales scaled a decadal high, driven by greater transactions of high-value properties. Simultaneously, the commercial office sector posted its second-best year, with 59.6 million sq ft of office space deals.

According to Baijal, the optimism among real estate stakeholders is firmly rooted in a prolonged period of growth, which now appears to be sustainable for the mid-to long term, bolstered by robust demand trends and fuelled by significant infrastructure, creating more opportunities.

In 2023, office space transactions in India surged by 15% to 59.6 million sq ft. Despite office leasing volume being slightly lower than the peak in 2019, the strong occupier activity underscored the country’s economic strength.

In the residential sector, despite the central bank’s 250 basis point increase in policy rates from May 2022 to February 2023, and a steady rise in property prices, sales volume grew 5% to 329,097 units in the last calendar year.

The residential market outlook reflects enhanced optimism on parameters of residential sales and launches, as stakeholders remain optimistic on demand sustenance. The office market outlook is also set to show buoyancy on all key parameters of leasing, supply, and rents as the stakeholders parameters of leasing, supply, and rents as the stakeholders remain confident of the performance of this asset class over the next six months.

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