New Delhi: Housing demand is expected to pick up in next six months as sentiments have improved after the government announced tax incentives to the real estate sector in this year's budget, according to a survey.
Industry body FICCI and property consultant Knight Frank India have jointly released a report 'Real Estate Sentiment Index' for January-March 2016 that is based on survey of key supply-side stakeholders, which include developers, private equity funds, banks and non-bank financial companies (NBFCs).
"Overall, there is a considerable improvement in the sentiments for the residential sector. The number of respondents with a positive outlook for the sector has gone up in Q1 2016,"
"Stakeholders are quite optimistic about residential sales nearly 54 percent of the respondents believe that the demand will pick up in the coming six months," Knight Frank said.
The consultant said that the pressure on unsold inventory has been reducing since the last four quarters due to limited number of new launches. Moreover, the developers have been focussing on project completions, instilling confidence in buyers.
The benefits provided to buyers in the Union Budget 2016 are also expected to push demand further, the report said.
While the current sentiment has just breached the 50 mark, the future sentiment score jumped up to 67, a nine points rise compared to the last quarter, indicating a revival in stakeholder sentiments.
"After a lull of five quarters, the overall sentiment has experienced a sharp uptick at the back of the Union Budget's focus on real estate and infrastructure," said Samantak Das, Chief Economist and National Director, Research, Knight Frank India.
The Real Estate Regulation Bill becoming an Act has also boosted the sentiment further since the sector is expected to become much more transparent and organised which in turn will benefit all the stakeholders, he added.
"The stakeholders have been optimistic about the Office market for quite some time now and the same trend has been reflected in this survey as well. Residential sector, on the other hand, has restored positive sentiment amongst the developers and lenders for the first time after four quarters," Das said.