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Time of India
30-07-2025
- Business
- Time of India
Real estate sentiment improves in Q2 2025 as demand, liquidity and policy support boost outlook: NAREDCO Index
Policy easing, demand revival drive recovery Live Events Developers take the lead in confidence surge Premium housing fuels residential recovery Commercial office market remains resilient Improved liquidity and macroeconomic stability Industry poised for sustained growth (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel After a year-long moderation, optimism has returned to India's real estate sector, driven by macroeconomic stability , accommodative policy, and robust demand in premium housing and office spaces. The Q2 2025 Knight Frank–NAREDCO Real Estate Sentiment Index reveals a marked improvement in confidence among developers, investors, and to the 45th edition of the index, the Current Sentiment Score rose to 56 in Q2 2025 from 54 in the previous quarter, while the Future Sentiment Score jumped to 61, up from 56. Both figures reflect a shift toward optimism after four quarters of cautious outlook.A confluence of favorable economic indicators—including a six-year low in CPI inflation (3.2%), record GST collections of Rs 2.4 lakh crore, and a 100-basis-point rate cut by the RBI in H1 2025—has helped rejuvenate stakeholder sentiment. These developments have improved liquidity, lowered borrowing costs, and sparked confidence in high-value residential and commercial segments.'This quarter marks a turning point,' said Shishir Baijal, Chairman and MD, Knight Frank India. 'Improved macro fundamentals and maturing sector strategies are enabling stakeholders to realign toward long-term growth, especially in premium and yield-accretive assets.'Developers exhibited the sharpest rise in confidence, with their Future Sentiment Score climbing from 53 to 63. Factors such as easier financing, stronger demand for luxury housing, and sustained commercial leasing in urban hubs are reinforcing their participants—banks, NBFCs, and private equity players—also reflected higher optimism, with their sentiment score increasing to 60 from 57. Structured funding opportunities in premium residential and office markets continue to attract institutional regions, sentiment rebounded, with the South leading at a score of 63, thanks to resilient markets like Bengaluru and Hyderabad. The North, previously hit by post-COVID uncertainty, rose from 48 to 55, while the West and East maintained a strong footing at 61 each.A strong 70% of stakeholders expect residential launches to remain stable or grow, with a marked preference for premium homes priced above Rs 1 crore. However, developers remain cautious on affordable housing due to tight margins and rising expectations also held strong, with 94% of stakeholders anticipating stable or rising prices, backed by double-digit year-on-year growth in cities like Bengaluru, Delhi-NCR, and office segment continues to perform well, buoyed by demand from Global Capability Centres (GCCs), third-party IT firms, and flex-space operators. About 80% of respondents foresee leasing volumes staying strong or improving, while 93% expect rentals to remain stable or Hyderabad, and Pune remain focal points, despite tight Grade A supply. Developers are taking a cautious approach to new commercial development, focusing instead on meeting targeted residential credit availability, thanks to the RBI's 100-bps rate cut, has significantly boosted funding sentiment. Ninety percent of stakeholders expect access to capital to stay stable or improve, compared to 79% in the previous robust macroeconomic indicators—ranging from record GST collections to an expanding PMI—have added to the positive outlook. About 70% of stakeholders now expect India's economic momentum to sustain or improve, up from 55% in Babu, President of NAREDCO, noted that the Q2 results signal the sector's growing resilience. 'Backed by lower borrowing costs, policy support, and strong demand for premium real estate, India's property market is on a strong footing for continued growth through 2025,' he said.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Time of India
19-05-2025
- Business
- Time of India
Realty stakeholders' sentiment turns cautious optimistic in Q1 amid global headwinds
Stakeholders in the real estate industry, such as developers, financiers, and institutional investors remained cautiously optimistic in the first quarter of 2025, even as sentiment levels showed a slight dip, showed the Knight Frank-NAREDCO Real Estate Sentiment Index for January-March. The current sentiment score declined to 54 from 59 in Q4 2024, while the future sentiment score eased to 56, also down from 59. Both metrics, though still in the optimistic zone, reflect rising caution amid global trade tensions , regional instability, and broader economic recalibration. Commercial real estate continues to underpin market resilience , with robust leasing activity and steady rental growth supporting positive sentiment. In the first quarter of 2025, around 82% of stakeholders expected leasing volumes to remain stable or increase, while 91% anticipated rents would hold steady or rise—signalling sustained demand and occupier confidence. The residential segment presents a mixed picture. While 93% of respondents of the survey expected prices to stay stable or increase, only 67% foresee similar trends in new launches. Sentiment on residential sales has notably moderated, with just 50% of stakeholders expecting improvement or stability--down from 88% in the first quarter of 2024. 'Q1 2025 marks a phase of strategic recalibration for the real estate sector, shaped by evolving global trade dynamics, softening consumption, and heightened geopolitical sensitivity. Despite these shifts, India's office market remains resilient, and the continued strength of the premium residential segment affirms the sector's underlying robustness. As macroeconomic indicators adjust, real estate is displaying its capacity to adapt with stability and long-term potential,' Shishir Baijal, CMD, Knight Frank India. These findings, part of the Knight Frank–NAREDCO Real Estate Sentiment Index for Q1 2025, gauge perceptions from developers, lenders, and other supply-side players. A score above 50 signals optimism, while anything below 50 indicates negative sentiment. 'While the Sentiment index shows a marginal decline in both current and future sentiment scores compared to Q4, this slight dip amidst global uncertainties reflects the strength and adaptability of India's real estate sector. The industry continues to move forward with optimism and long-term conviction,' said Hari Babu, president, NAREDCO. According to him, the Indian real estate sector is showcasing robust performance in the commercial segment, driven by the demand from Global Capability Centres (GCCs) and tech-enabled enterprises — reaffirming India's growing stature as a global business hub. On the residential front, developers are adopting a more mature, demand-led approach by focusing on high-ticket projects while rebalancing supply in the mid and affordable segments. The developer future sentiment score dropped to 53 in Q1 2025 from 58 in Q4 2024, as developers recalibrate supply strategies amid slowing low to mid ticket size segment demand in the residential sector and rising costs. The non-developer future sentiment score--including banks, financial institutions, and private equity funds--moderated to 57 from 60, reflecting a wait-and-watch approach on capital deployment, while remaining optimistic on office and high-ticket size residential segments. Economic Times WhatsApp channel )
