NEW DELHI: Housing sales have remained lower than expected so far during the current festival season mainly due to high interest rates and the demand is likely to pick up only in the next 6-8 months, according to a report by Knight Frank and Ficci.
Property consultant Knight Frank and industry body FICCI today released the Real Estate Sentiment Index for Q3 2014 (July-September) based on a survey of various supply-side stakeholders including developers, private equity, banking and non-banking financial firms.
The current sentiment index, for all asset classes and all locations, surged by 12 points to 63 points, while the future sentiments have also improved by 2 points to 71 points.
"Although the current sentiment score merely breached the 50 mark in Q2 2014 (April-June), results for this quarter (July-September) has risen to 63 which is attributable to the stakeholders' positive perception regarding the economy, residential sales and price appreciation compared to six months back," Knight Frank said in a statement.
The Union Budget 2014-15 has laid considerable emphasis on the realty sector and this has infused a positive sentiment for the future, it added.
However, the report said the euphoria seen in the housing segment about sales and launches during the previous survey has been rationalised. The optimism about housing price rise continues to hold steady in this quarter.
"Festival season have not really kept up to the expectations in terms of housing sales. Home buyers are on wait and watch mode hoping that interest rates will fall and economy will improve. We feel that in another 6-8 months, the actual transactions will start picking up," Knight Frank India Chief Economist and Director Research Samantak Das said.
He noted that although enquiries have increased, the actual buying is not taking place.
The festive season has not brought in the expected cheer to the realty sector, with markets reporting "not so-encouraging" housing sales over the past two weeks, the report said.
"Unlike the boom years, stakeholders this year had resisted the temptation to launch new projects in the season, focusing instead on reducing the inventory that has piled up over the past few quarters," it added.