Even as the current sentiment remains sluggish, industry experts believe the real estate sector is likely to see some improvement in the next six months when property prices will also witness upward movement.
"As per the stakeholder survey, not just supply and demand for residential property, but price too is expected to witness an upward movement in the next six months," Knight Frank India Chief Economist and Director-Research Samantak Das said in New Delhi.
He was talking to reporters after releasing a report on 'Real estate sentiment index', jointly brought out by FICCI and Knight Frank India, a real estate consultancy.
However, if an analogy is drawn with the 2009 general election period, the determinants of housing demand are strikingly different this time around, Das said.
"Property prices have risen faster than the growth in household income or general inflation during this period. Interest rates are much higher. Lack of any meaningful improvement in determinants of housing demand, according to us, means the situation will remain the same."
A majority of respondents surveyed for the report were positive on economic front and expect an improvement in the next six months.
Stakeholders feel the realty market has deteriorated compared to the last six months and the current sentiments are pessimistic across all zones. However, east and south zones remain marginally more optimistic about near future compared to the rest, the report said.
"Compared to the previous two quarters, sentiment levels of the industry have deteriorated in the current quarter and they are pessimistic across zones, barring the east and south.
"A greater focus on driving economic activity and streamlining regulatory processes, will help build both business and consumer confidence," FICCI Real Estate Committee Chairperson and Mahindra Lifespaces Managing Director and CEO Anita Arjundas said.
The report pointed out that while there is an evident optimism for the residential sector, the office market is expected to remain depressed in the coming two quarters.
"Notwithstanding the economic risks associated with the impending general election, stakeholders expect an economic expansion during the next six months," Knight Frank India Chairman and MD Shishir Baijal said.
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