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Knight Frank India, a property consultancy firm, in its latest report - Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index – Q4 2021 (October – December 2021) - has noted that the current Sentiment Index Score of the sector has notched up to an all-time high of 65 in Q4 2021 despite the ongoing challenges of the third wave of COVID-19. The previous high reached was a sentiment score of 63 in Q3 2021. This improvement in the current sentiment score is on account of the reduced uncertainty on the economic front leading to stability in demand in the real estate sector, as per the firm. The note added that the Future Sentiment score, that gauges the stakeholders’ expectation in the short to medium term, also remains in the optimistic zone, albeit, dipped from 72 in Q3 2021 to 60 in Q4 2021, reflecting a prudent optimism as the Omicron inflicted risk on the Indian economy is yet to be discerned.

To give a perspective, a score of above 50 indicates ‘optimism’ in sentiments, a score of 50 means the sentiment is ‘same’ or ‘neutral’, while a score below 50 indicates ‘pessimism’

On the office market outlook, the report highlighted that 61% respondents in Q4 2021 opined that office leasing will remain stable over the next 6 months. Stakeholder outlook for office rents improved in Q4 2021, it added. Compared to Q3 2021 - when 27% respondents felt office rents may increase in next six months – this time, 47% opined the same. In terms of new office supply, 88% of the Q4 2021 respondents are of the opinion that new office supply will either remain stable or will witness an increase over the next six months, noted the report.

Further, on the residential market outlook, 72% of the Q4 2021 survey respondents opined residential sales to remain stable over the next six months, while 75% of surveyed stakeholders fear new supply may decrease in the next six months. An overwhelming majority, 62% of the respondents, expect a decline in residential prices over the next six months due to the Omicron virus related disruptions. At a time when the residential price increase was coming to the fore, the ongoing third wave disturbances have impacted stakeholder sentiments. Even though Omicron variant related disruptions on the real estate sector are yet to be felt, the stakeholders remain optimistic, yet prudent about the next six months, the report concluded.

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