MUMBAI: Property market across top markets including National Capital Region and Mumbai Metropolitan Region has deteriorated further compared to last six months and current sentiments are pessimistic across all zones, showed the maiden real estate sentiment index jointly developed by industry FICCI and Knight Frank India.
The index is based on findings of the quarterly survey capturing the supplier side perspective on the real estate market condition across top seven markets in the country. Apart from NCR and MMR, the survey also considered Pune, Chennai, Bangalore, Hyderabad and Kolkata to represent Indian real estate scenario.
Most respondents that included realty developers, contractors, private equity funds, banks and financiers are positive about the economic scenario and expect an improvement in the next six months. While there remains an evident optimism for the residential real estate, the office market is expected to be pessimistic in the next two quarters.
The report showed that residential unit launches and absorption level in these seven markets in October-December quarter is close to the bottom witnessed in January-March quarter.
The current real estate sentiment score stands at 33 implying that supply side stakeholders believe the property market is worse than six month back scenario. Future sentiment score, which indicates expectation for next six months, stood at 50 indicating a status quo for the overall realty sector.
Credit lending and funding situation appears worse now compared to six months back and is not expected to improve in the near-term future, the report said.
All parameters including economy, residential launches, sales, price appreciation, new office supply, leasing volume, office rental appreciation and funding scored less than 50 for current index on scale of 100, indicating pessimism. Of these parameters future score for economy, residential launches, housing sales and price appreciation rose above 50 indicating optimism in the next six months.
For commercial real estate, respondents are skeptical and expect a contraction in demand, supply as well as prices during January to June period.
While current sentiment is pessimistic across all zones, respondents from the east and south were slightly more optimistic about the next six months compared to other zones and expect the real estate development to remain stable.
According to residential price index that uses January-March quarter of 2009 as base showed Mumbai and Pune are frontrunners in price appreciation during 2009-13. Prices in NCR market trended downwards till the end of 2010, post which they have grown more than any other major residential market in India.