Market Sentiments Sink To Demonetisation Period Level, Says Survey

Market Sentiments Sink To Demonetisation Period Level, Says Survey
Himali Patel - 18 October 2019

Mumbai, October 18: It is now evident that when it comes to the real estate sector, traditional sources of funding are drying up so much that the stakeholders see no rescue at all. The sector is plagued with defaults, unorganised developers finding it difficult to financing and not to forget NBFCs still remain a pain point for the sector. Amid all these, it is not surprising that a recent survey by Knight Frank – FICCI – NAREDCO in their real estate sentiment index Q3 2019, showed the current sentiment of the stakeholders in India has significantly dropped further to (42) in the July-September quarter of 2019 (Q3 2019) from the preceding quarter.

In simple terms, the current tension level was seen during the heightened uncertainty period of pre-election in the first quarter of 2014 and the demonetisation period (41) in the last quarter of 2016. As per the survey, the score of over (50) indicates ‘Optimism’ in sentiments, a score of 50 means the sentiment is ‘Same’ or ‘Neutral’ and score below 50 shows ‘Pessimism.’ The post survey finding goes on to say that despite many measures taken by the government, including the slashing of the corporate tax rate to 22 per cent, the liquidity support to HFCs and NBFCs by way of creation of a stressed asset fund (AIF) of Rs 20,000 Crore to boost liquidity have failed to infuse confidence in the market.

This has led the agency to downgrade the current sentiment score. “These measures have not helped infuse confidence in the stakeholders, as the real challenge lies in the demand-side story, where the end users are unwilling to make home purchases owing to lack of financial confidence. The supply-side sops will not be enough till the time demand is revived by putting money in the hands of the consumer and confidence is restored,” says Shishir Baijal, chairman and managing director of Knight Frank India.