Mumbai: With COVID-19 crisis playing havoc on the economy and real estate sector, the 24th Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q1 2020 Survey shows that current sentiment of real estate stakeholders in India has dropped to an all-time low of 31 in the first quarter (January to March) 2020.
The survey conducted in the first week of April further indicates that the future sentiment score outlining the industries’ market expectations has also dipped well into the pessimistic zone at a score of 36 in Q1 20 against the score of 59 in Q4 2019.
“The real estate sector that had just about started showing some signs of revival during the last quarter of 2019 has suffered a severe setback due to the COVID-19 crisis,” concluded the survey of more than 250 stakeholders.
A score of over 50 signifies optimism in sentiments, a score of 50 means the sentiment is same or neutral while a score of below 50 shows pessimism.
The sentiment score had revived in the Q4 2019 after being in the pessimistic zone (below 50 mark) for two consecutive quarters. The revival was however short-lived as the current sentiment score has dropped to 31 in Q1 2020.
The mood of the stakeholders as regards the overall economy and the real estate sector had been in the pessimistic zone in the second and third quarter of 2019 due to credit squeeze and overall economic slowdown. With the slew of measures announced by the government to revive the sector, the last quarter of 2019 infused confidence in the real estate market.
The creation of a stressed asset fund of Rs 25,000 crore to provide last-mile funding to stalled affordable housing projects was a welcome step in this direction. However, according to the survey, COVID-19 outbreak has marred the stakeholder’s sentiments.
The future sentiment score has sharply fallen to 36 in Q1 2020 after having bounced back in Q4 2019. Looming uncertainty due to the pandemic has adversely impacted the stakeholder sentiments for the coming six months as well.
