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Covid II in 2021 was not without its troubles. Still, the real estate sentiment index reached a high of 65 in the fourth quarter of that year, according to a new report, Knight Frank-Ficci-Naredco Real Estate Sentiment Index – Q4 2021. The score was 63 in the previous quarter. In the second quarter of 2021, the lowest score was 35, while in the first quarter, it was 57.
According to the survey, the consistent rise of the real estate industry can be attributed to various factors, including lower premiums and stamp duties.
Enhanced Emotion
The sentiment index captures real estate investors’ attitudes regarding the industry. This improvement in the Current Sentiment Score is due to reduced economic uncertainty, which has stabilised demand in the real estate industry, according to the research.
But the lower future sentiment score, which measures stakeholders’ expectations in the near to medium term, reflects 2022’s uncertainty. From 72 in Q3 to 60 in Q4, this score has decreased. According to the paper, “prudent optimism as the Omicron imposed danger on the Indian economy is yet to be detected” exists. The Q1 and Q2 results were significantly worse, with a combined score of 57 and 56.
The last five quarters have seen the real estate industry show an indomitable spirit, with residential sector growth leading the way.” The Reserve Bank of India’s (RBI) solid assurance in maintaining the status quo has further increased demand in the market,” chairman and managing director of Knight Frank India, said in a statement.
Growth Promoting Factors
According to recent research by investment management business Colliers, there has been an increase in the number of people who want to invest in real estate as a result of a reduction in stamp duty in some locations. Stamp duty refunds for low-cost homes have been announced by a number of state governments, including Maharashtra, West Bengal, and Karnataka, amongst others.
This analysis found a 53% increase in residential property registrations in Maharashtra between 2020 and 2021. As the state government granted a 2% stamp duty discount, the number of property registrations in West Bengal skyrocketed by 2021. According to the survey, stamp duty is often a major factor in determining whether or not a buyer will purchase a property.
According to the report, a reduction in the premium charged for real estate development under the Development Control and Promotion Regulations (DCPR) is another factor that fueled growth in real estate investments. Up until December 31, 2021, the premium fee was halved. When it came to fresh launches and investments, the move was important. “According to a report, the number of new product releases will increase in the fourth quarter of 2020 and beyond as a result of lower premiums and other incentives.
In 2022, the market is significantly displaying a strong upward trend. Demand and supply will be more balanced in 2022 if demand continues to grow at its current rate and is fueled by solid consumer propensity. Later in the year, prices could rise by 2-5 per cent as well. In general, Ramesh Nair, CEO of Colliers India and managing director of market development in Asia, adds that features like simpler land-use conversion, single-window clearances and sops for migrant labour are vital for equitable growth.
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