NEW DELHI,
Stakeholder sentiment in real estate has dropped for the first time in five quarters, a new survey has found.
According to the ‘Real Estate Sentiment Index for October–December 2014’, released by Knight Frank India and FICCI on Tuesday, real estate sentiment across all zones has witnessed a major dip during the fourth quarter of the annual year 2014, and investor confidence has taken a hit owing to oversupply within the residential space.
“A perceived delay in the delivery of big election promises such as the implementation of the Goods and Services Tax, the Insurance Bill and a soft stance on cutting interest rates have played a major part in causing sentiment index levels to dip in Q4 2014,” it said. Subdued festive sales too dented future sentiment levels of developers.
Though the Indian economic story seems to be heading in the right direction post the new Government, the five-point drop in the future Sentiment Index levels indicates a rationalisation in stakeholder expectations regarding the pace at which changes will be brought about in the country, the survey said.
In the residential space, increasing illiquidity caused by dipping transaction numbers and delayed economic revival have weighed down the market. However, the office market saw uptake happening across all regions. “Relocation and consolidation of office spaces have been the major drivers of this segment, with the majority of the contribution coming from the outsourcing industry. Unlike the residential segment, vacancy levels within premium office buildings across prime locations have been consistently reducing, with chances of a further drop in the near future,” it added.
The Real Estate Sentiment Index is based on a quarterly survey of supply-side stakeholders such as developers, private equity funds, banks and non-bank financial companies. The survey was conducted during October-December 2014.