Despite a slew of recent announcements to arrest the growth slowdown and revive liquidity and demand in the real estate, sentiments among the stakeholders in the sector have dipped to the bearish sentiments prevalent during the demonetisation period in late 2016, said a report on Thursday.
A report, jointly prepared by Knight Frank, FICCI and NAREDCO, said that outlook for the next six months has also turned "pessimistic".
Post the demonetisation of the earstwhile Rs 500 and Rs 1,000 denomination notes, the real estate went into a slump as the sector was largely dependent on cash.
"Real Estate Sentiment Index Q3 2019 shows that the current sentiments of the real estate stakeholders in India has plummeted further to 42 in the July-September quarter of 2019 (Q3 2019) from the preceding quarter - a level previously 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," the report said.
It, however said that the sentiments towards the commercial real estate sector have remained steady, with the outlook for the new office supply strong for the coming six months.
A score of over 50 signifies 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral', while a score of below 50 shows 'pessimism'.
The stakeholders continue to be pessimistic and wary owing to the overall economic slowdown and the slump in domestic consumption demand, it said.
"Drying credit flow to developers due to the NBFC crisis and slowing down of the economy at 5 per cent in the June quarter a five-year low, has all negatively impacted the current sentiment scores," said the report.
Measures taken by the government such as the slashing of corporate tax rate, the liquidity support to housing finance companies and non-banking financial companies (NBFC) and the creation of a stressed asset fund of Rs 20,000 crore to boost liquidity and revive demand have failed to infuse confidence in the market, it observed.
The outlook index dropped to an all-time low of 49 during the July-September quarter, it said, adding that "the future sentiment index score is a clear indication that the sector is under pressure".
Another report by PropTiger.com showed that housing sales across major cities declined 25 per cent during the July-September quarter to 65,799 units.
During the corresponding period of financial year 2018-19 (FY19), about 88,078 units were sold, the report released on Thursday said.
The report also said that new project launches in the country declined 45 per cent in the July-September quarter of the financial year 2019-20 (FY20), when compared to the levels seen in the same quarter last year.
"Home sales reduced by 25 per cent as compared to the corresponding quarter last financial year. Quarter-on-quarter comparisons also showed decline in both sales and launches wherein new launches fell 32 per cent and home sales declined by 23 per cent," it said.
A comparison of numbers between the first half of FY19 and FY20 also showed that home sales and new launches moved downwards. As compared to the sale of 1,70,715 units in the first half of FY19, only 1,51,764 units were sold in the same period in FY20, registering an 11 per cent fall.
Similarly, as against the launch of 1,37,146 fresh units in the first six months of FY19, only 83,662 units were launched in India's nine cities in the first six months of FY20, a fall of 39 per cent, it added.