Knight Frank–NAREDCO Real Estate Sentiment Index Q3 2024 highlights growth, confidence, and resilience in India’s real estate sector.

The 42nd edition of the Knight Frank–NAREDCO Real Estate Sentiment Index for Q3 2024 (July–September 2024) paints a picture of cautious optimism in India’s real estate sector. Despite a marginal dip in the Current Sentiment Score to 64 (down from 65 in Q2 2024), the Future Sentiment Score rose to 67, reflecting growing confidence in the sector’s potential over the next six months. Both scores remain in the positive zone, signifying sustained trust among stakeholders.

Residential Market: Steady Growth and Optimism

India’s residential real estate market continues to demonstrate resilience and optimism. According to the Q3 2024 survey:

62% of respondents foresee a rise in residential prices, driven by demand, particularly in the luxury housing segment (₹10 million and above).

40% anticipate increased residential sales, while 42% predict an uptick in new launches, reflecting steady market confidence.

Stability is another key theme, with 28% expecting consistent sales and 36% forecasting stable launches.

Hari Babu, President of NAREDCO, remarked, “The Q3 2024 Real Estate Sentiment Index showcases the sector’s resilience amidst global uncertainties. With the RBI projecting a GDP growth rate of 7.2% for FY 2024-25 and a stable interest rate environment, the real estate market remains well-poised for sustainable growth.”

Office Market: Robust Performance and Rising Confidence

The office market sentiment remains strong, buoyed by increasing corporate demand and a favorable economic environment. Key highlights include:

76% of respondents anticipate an increase in office leasing activity.

73% predict a rise in office rents, driven by demand for premium office spaces.

47% expect an uptick in new office supply, showcasing a stable growth trajectory.

Shishir Baijal, CMD of Knight Frank India, noted, “Strong demand in commercial leasing and stable rents underline the sector’s robust performance. Supported by favorable market dynamics, the office market continues to show resilience and potential for further growth.”

Economic and Financial Sentiments: Moderated Optimism

While optimism about India’s economic outlook remains, it has softened slightly compared to previous quarters:

46% of respondents expect an improvement in the economic scenario.

47% anticipate increased funding availability, reflecting moderated confidence compared to 51% in Q2 2024.

Developer and Non-Developer Sentiments: Renewed Optimism

Developers’ Future Sentiment Score improved from 61 in Q2 2024 to 65 in Q3 2024, driven by adaptive strategies and robust sales momentum.

Non-developers, including financial institutions and private equity funds, maintained a consistent Future Sentiment Score of 68, signaling confidence in well-structured projects and the sector’s long-term growth.

The Road Ahead

India’s real estate sector continues to ride on a wave of optimism, bolstered by stable economic fundamentals and evolving market dynamics. With increasing demand for residential and commercial spaces, the sector remains resilient and positioned for sustained growth. Stakeholders emphasize the need for addressing existing challenges to unlock further potential and ensure long-term sustainability.

As the Q3 2024 Sentiment Index indicates, the Indian real estate market is not just recovering but evolving to meet future demands, providing opportunities for growth and innovation.