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Real estate industry sentiment remains optimistic and rising: Knight Frank-NAREDCO Sentiment Index Q2 2023

New Delhi, July 24, 2023: The 37th edition of the Knight Frank-NAREDCO Real Estate Sentiment Index Q2 2023 (April-June) report cited that the Current Sentiment Score scaled up from the previous quarter’s 57 to 63, in the optimistic zone. This is due to the continued resilience of the Indian economy amid a recessionary environment globally. The Current Sentiment Score signifies stakeholders’ current outlook in comparison to the preceding six months. 

During Q2 2023, the Future Sentiment Score rose from 61 in Q1 2023 to 64 in the optimistic territory as India’s macroeconomic indicators remained firm, despite headwinds on some parameters.

Current and Future Sentiment Scores

Score/Quarter Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023
Current Sentiment Score 6365686261595763
Future Sentiment Score 7260756257586164

Source: Knight Frank India |Score >50: Optimism| Score =50: Neutral/Same| Score <50: Pessimism

Developers And Non-Developers Inch Up in Optimistic Zone

The Developer Future Sentiment score has increased from 61 in Q1 2023 to 65 in Q2 2023. With a momentary pause in interest rate hikes by the Reserve Bank of India (RBI), real estate developers remain optimistic about the next six months as the underlying demand for real estate remains firm.


The Non-Developer (the segment which includes banks, financial institutions, and PE funds) Future Sentiment score increased from 61 in Q1 2023 to 62 in Q2 2023. The institutional investors, who remained watchful in the past periods, indicated enhanced confidence in the Indian economy. The pause in the interest rate hike cycle by the RBI also influenced them positively.

Source: Knight Frank India |Score >50: Optimism| Score =50: Neutral/Same| Score <50: Pessimism

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “Amidst turbulent global developments, India’s economy has firmly positioned itself as one of the world’s fastest-growing large economies, which has significantly influenced stakeholders’ sentiments in Q2 2023. As a result, the Current Sentiment Index Score surged from 57 in the previous quarter to 63. Despite facing high inflation in developed markets, the Indian economy demonstrated resilience and bounced back, instilling confidence in stakeholders regarding the stability of the domestic economic climate and real estate sector performance over the next six months. Even though retail inflation experienced a temporary spike from 4.25% in May to 4.81% in June 2023, it remains within the RBI’s acceptable tolerance band of 2-6%. The Future Sentiment Score therefore continued its positive trend, climbing from 61 in Q1 2023 to 64 in Q2 2023, mainly because the policy environment continues to support economic growth.”

Rajan Bandelkar, President of NAREDCO and Managing Director of Raunak Group, said, “The bounce back of the Indian economy, coupled with inflation within the RBI’s tolerance band, has instilled confidence among stakeholders in the domestic economic climate and the real estate sector’s performance for the next six months. The Future Sentiment Score also witnessed an increase, thanks to stakeholder optimism regarding the Indian economy’s trajectory and the sustained demand in the real estate sector. While zonal scores surged in all zones except the South, where caution prevails, the overall scores for all regions remained firm in the optimistic zone. This signifies a greater sense of confidence in the performance of these markets in the upcoming six months.”

Robust Residential Market

The Residential Market Outlook reflects enhanced optimism in Q2 2023 as stakeholders remain confident on all parameters – sales, launches, and pricing for the next six months. Compared to the past quarter, the percentage of stakeholders who expect residential sector growth has increased this time on all fronts. In particular, the stakeholder sentiments on residential launches and pricing have only improved with each passing quarter since the past year. In Q2 2023, 55% of the survey respondents expected residential sales to increase in the next six months, compared to 48% who opined the same in the previous quarter. The pause in the interest rate hike cycle has spiked stakeholder sentiments about the sustenance of the current demand momentum in the next six months as the residential sector stands on a firm footing supported by policy measures and the rally witnessed in 2022.

In Q2 2023, 62% of the stakeholders opined that residential launches will improve in the next six months. In Q1 2023, 56% of the stakeholders held a similar view. With steady sales in the residential market, the stakeholder outlook towards the introduction of new launches remained robust. In Q2 2023, 64% of the survey respondents expect residential prices to increase in the next six months on the back of steady demand for residential property. In comparison, during Q1 2023, 61% of the survey respondents held a similar view.

Q2 2023Residential SalesResidential LaunchesResidential Prices

Source: Knight Frank Research

Buoyant Office Market 

In Q2 2023, half of the survey respondents opined office leasing to increase in the next six months. In the previous quarter, 50% held a similar view of the same. Despite a threat of recession in some major developed markets, stakeholders remained upbeat about the India growth story and resilience to continue in office leasing on account of strong demand from India-facing businesses, flex/co-working, and the rise of global capability centers in the country.


In Q2 2023, 47% of survey respondents expect office supply to improve in the next six months. In the previous quarter, 43% of survey respondents held a similar opinion. In Q2 2023, 45% of the survey respondents expect office rents to increase, whereas, in the previous quarter, 38% of the survey respondents held a similar view.

Q2 2023Office LeasingNew Office SupplyOffice Rents

Source: Knight Frank India

Zonal Scores in Optimistic Zone

In Q2 2023, the Future Sentiment scores surged in all the zones except the South Zone, as stakeholders in this region remain optimistic but cautious about the outlook for the real estate sector in the next six months. 

Despite the moderation in the score for the South Zone, the scores for all remained comfortably above 50 in the optimistic zone signifying greater confidence in performance for these markets in the next six months.

Zonal Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023
East 5721666973

Source: Knight Frank India |Score >50: Optimism| Score =50: Neutral/Same| Score <50: Pessimism


Economic Scenario Resilient  

Based on the findings of our survey, stakeholder sentiments have only strengthened with each passing quarter on the overall economic momentum front in the past year. As compared to 52% in Q1 2023, 55% of survey respondents in Q2 2023 indicated an increase in their expectations on this parameter. India’s firm positioning as the fastest-growing economy in a bleak global environment became more prominent with the bounce back that happened after the pandemic. RBI’s timely policy intervention to support growth gave more confidence to stakeholders that the economy has come out of the shadow of the pandemic.

Due to global geopolitical developments, stakeholder sentiments towards funding availability also improved as India has a very powerful appeal for attracting investments from foreign funds. In Q2 2023, 49% of stakeholders opined that the availability of funding would increase in the real estate sector in the next six months. 

Q2 2023Overall Economic MomentumAvailability of Funding

Source: Knight Frank India


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