Mumbai, November 29, 2024: The 42nd edition of the Knight Frank – NAREDCO Real Estate Sentiment Index Q3 2024 (July–September 2024) highlights continued optimism in the real estate sector, despite a marginal dip in the Current Sentiment Score, which stands at 64, down from 65 in Q2 2024. Encouragingly, the Future Sentiment Score improved to 67, up from 65 in the previous quarter, signalling rising confidence in the sector's growth over the next six months. Both scores remain firmly in the positive zone, reflecting sustained trust in the industry's long-term potential.
In the residential market, optimism prevails as 62% of respondents anticipate a rise in residential prices, while 40% foresee increased sales, and 38% expect market stability. Similarly, the office market outlook is buoyant, with strong confidence in key parameters such as leasing, supply, and rents, underscoring stakeholder optimism for robust performance in the coming months.
The Knight Frank – NAREDCO Real Estate Sentiment Index captures the perceptions of supply-side stakeholders and financial institutions regarding the real estate sector, economic climate, and funding availability. A score of 50 indicates a neutral outlook; scores above 50 reflect positive sentiment, while those below 50 suggest a negative outlook.
Current and Future Sentiment Scores
| Score/Quarter | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | ||||||||||||
| Current Sentiment Score | 68 | 62 | 61 | 59 | 57 | 63 | 5959 | 69 | 72 | 65 | 64 | ||||||||||||
| Future Sentiment Score | 75 | 62 | 57 | 58 | 61 | 64 | 65 | 70 | 73 | 65 | 67 |
Source: Knight Frank India
Sentiments of Developers and Non-Developers
The Developer Future Sentiment Score rose from 61 in Q2 2024 to 65 in Q3 2024 indicating renewed optimism. Developers remain positive, adapting to shifting market dynamics and leveraging ongoing sales momentum.
Meanwhile, the Non-Developer Future Sentiment Score (comprising banks, financial institutions, and PE funds) maintains status quo at 68 through Q2 and Q3 2024, reflecting their confidence in well-structured real estate projects and the sector's long-term growth prospects.
Source: Knight Frank Research Note: Non-Developers include banks, financial institutions, and PE funds
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, "The Q3 2024 Real Estate Sentiment Index highlights the strength of India's real estate sector. While the Current Sentiment Score moderated slightly, the Future Sentiment Score improved, reflecting growing confidence among stakeholders. Strong demand in high-end residential sales and stable leasing in commercial spaces underscore the sector's steady performance. Developers, with improved sentiment this quarter, remain optimistic. Supported by stable economic fundamentals and favourable market dynamics, the sector is well-positioned for sustained growth and continued opportunities."
Residential market outlook
The outlook for the residential market remains in the optimistic territory. In this quarter's survey, 40% of the respondents expect residential sales to increase and 28% predicted stability. This demonstrates steady confidence in market, with overall sentiment pointing towards gradual growth.
In Q3 2024, 42% of survey respondents were of the opinion that residential launches will improve while 36% indicated stability.
62% of the survey respondents in Q3 2024 expect residential prices to increase supported by consistent demand, mainly from the Luxury segment with ticket size ₹ 10 Mn and above.
Hari Babu, President-NAREDCO, said, "The Q3 2024 Real Estate Sentiment Index reflects the Indian real estate sector's resilience amidst global uncertainties. Despite a marginal dip in the current sentiment score, the sector remains optimistic. The uptick in the future sentiment score to 67 is a testament to the stakeholders' confidence in the sector's prospects. The RBI's GDP growth projection of 7.2% for FY 2024-25 and the stable interest rate environment will further boost investor sentiment. Developers are particularly optimistic, with their future sentiment score rising to 65. As the sector continues to grow, it's essential that we address the existing challenges and leverage opportunities for sustainable growth."
Residential market sentiment remains resilient
| Q3 2024 | Residential Sales | Residential Launches | Residential Prices | ||||
| Increase | 40% | 42% | 62% | ||||
| Same | 28% | 36% | 38% | ||||
| Decrease | 35% | 26% | 4% |
Source: Knight Frank Research
Office market outlook
The office market outlook for Q3 2024 reflects strong confidence, with stakeholders optimistic about the sector's long-term potential. According to the survey, 76% of respondents expect office leasing to improve, driven by positive corporate sentiment and a sustained recovery in demand. Additionally, 47% predict an increase in office supply, highlighting stability and continued growth in the sector.
This confidence extends to rental performance, as 73% of respondents anticipate a rise in office rents, fuelled by increasing demand for high-quality office spaces. These findings underscore the resilience and growth trajectory of India's office market, bolstered by a favourable economic environment and evolving corporate requirements.
Office Market Sentiment Strengthens Further
| Q3 2024 | Office Leasing | New Office Supply | Office Rents | ||||
| Increase | 76% | 47% | 73% | ||||
| Same | 19% | 40% | 26% | ||||
| Decrease | 9% | 17% | 5% |
Source: Knight Frank Research
Economic Scenario
Based on the findings of the survey 46% of respondents expect an improvement in the economic scenario, reflecting softened optimism about India's economic resilience and potential growth.
47% anticipate an increase in funding availability, demonstrating moderated confidence when compared to 51% in the previous quarter.
| Q3 2024 | Overall Economic Momentum | Availability of Funding | |||
| Increase | 46% | 47% | |||
| Same | 27% | 42% | |||
| Decrease | 27% | 14% |
Source: Knight Frank India Research
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