HOUSING PRICES TO RISE IN H2

Housing prices in India are expected to rise during the second half of this year with improved market sentiments on formation of a stable government at the Centre, according to Knight Frank-FICCI survey. The launch of housing projects and sales volume, which have been sluggish since last two years, are also likely to improve in the next six months, FICCI-Knight Frank said while releasing the sentiment index for the second quarter of 2014. The index, based on a survey of various stakeholders including developers, private equity, banking and non-banking financial firms, surged by 6 points to 69 points, highest since survey began three quarters ago. Stating that this is supply-side sentiment index, Knight Frank India Chairman & Managing Director Shishir Baijal said: "The fact that political stability has a perceptible effect on the real estate sector is quite apparent from the optimism showcased by stakeholders post the elections." Property consultant Knight Frank noted that real estate stakeholders seem markedly bullish about the future, in view of the stable government at the Centre, and expect faster decision making and reforms in the coming quarters. "Housing prices are expected to go up during the second half of 2014," Knight Frank India Chief Economist and Director Research Samantak Das told reporters here, but did not specify the quantum of likely appreciation. According to the survey, the market is significantly optimistic about the residential sector, with 62 per cent of the respondents saying that housing prices will rise in the next 6 months against 14 per cent in the previous survey. More than 80 per cent of the respondents feel that residential project launches and sales volume will improve in the coming six months. "With the backdrop of a stable government coupled with high expectations of faster decision making and positive reforms, the respondents have shown positive outlook pertaining to the residential sector in terms of sales and launches. In fact prices are also perceived to go up in the coming six months," Das said. Realty firm SARE Homes Executive Director David Walker said the housing market remained slow during last 18 months. Noting that sentiments have improved post election, he said there would be gradual increase in the transaction volume as well as prices in coming months. As per the survey findings, future sentiment scores have risen across all regions with north being the most upbeat. "75 per cent of the respondents anticipate the availability of funds to be better in the next six months." On the office segment, more than 75 per cent of the survey respondents believed that leasing volume would witness and upsurge by the end of Q4 2014. "However, they expect new office supply to remain under check, which is likely to have an impact on rental appreciation. Majority of respondents feel that office space rental growth will strengthen in the coming six months".