The sentiment in the property market is improving and becoming more rational, with the euphoria seen during the first six months of this year, tempering. This is one of the findings from the Real Estate Sentiment Index for July-September 2014 from Knight Frank India and Federation of Indian Chambers of Commerce & Industry.
Data from the survey shows that expectations of new home launches dipped in the recent quarter compared to the previous period. The proportion of people expecting an improvement in home sales also fell this quarter. The report notes that markets such as NCR and Mumbai have not even seen regular investments coming their way. The expectation is that it might take at least 6-8 months before actual transactions start picking up.
Even as overall sentiment improved from a year ago, different geographies showed diverging trend. For instance, while the southern and western market sentiment continued to be upbeat, expectations from the northern and eastern regions were lower in the recent quarter. Also, while developers appear upbeat, financial institutions have slightly moderated their expectations compared to the April-June 2014 quarter.
There were some bright spots too. The share of respondents who felt that home prices will appreciate in the future surged - from a mere 11 per cent during July-September 2013 to 68 per cent for the same period this year. The sentiment has been improving over the last four quarters.
The report notes that the actual performance within the office market was better than what was expected in earlier surveys.
New office completion and leasing volumes have performed better than expectations, until June 2014.