BENGALURU: The outlook for Indian real estate fell to a new 42 low in the quarter to September from a preceding quarter, a level previously seen during the heightened uncertainty period of pre-election in the first quarter of 2014 and the demonetisation period, found a jointly conducted survey by industry lobby Ficci , National Real Estate Development Council (Nardeco) and real estate services firm Knight Frank According to the above survey, the future sentiment score also dropped to an all-time low at 49 in Q3 2019. The outlook for the coming six months, has also turned ‘pessimistic’ for the first time, a clear indication that the sector is under immense pressure. Drying credit flow to developers due to the NBFC crisis and slowing down of the economy has all negatively impacted the current sentiment scores,” said the survey.“It is more significant to note that, for the first time, the stakeholders are wary regards the future six months for the real estate sector and the overall economy, thus pushing the sentiment score in the red. The supply-side sops will not be enough till the time demand is revived by putting money in the hands of the consumer and his confidence is restore.,” said Shishir Baijal, Chairman and Managing Director of Knight Frank India.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’.It said that weak demand, inventory overhang, developer defaults coupled with the worsening of the crisis engulfing nonbanking financial companies (NBFCs) had dried up funding for the sector, resulting in many real estate projects being stuck in the past one year.“From the supply side, with the short-term liquidity squeeze prevailing in the economy, even positive net worth companies across industries are turning into negative balance sheet. The current economic scenario makes it the right time for RBI to announce its one time roll over scheme similar to what was rolled out during the Lehman crisis period in 2009 under the global slowdown scenario,” said Niranjan Hiranandani, National President – NAREDCO & Founder & MD of Hiranandani Group saidThe outlook for the residential new launches, sales and price appreciation have yet again taken a hit in Q3 2019, clearly stating that the slew of measures taken by the by the government have not infused any confidence in the stakeholders.As many as 63% respondents said that the economic situation would be the same or even worsen in the coming six months. Stakeholders maintain a conservative outlook for the funding scenario, with 73% expecting it to worsen in the next six months, survey.The future sentiment score of 51 of the financial institutions is also the lowest since the Modi government has come to power. The liquidity crunch brought about by defaults of the IL&FS group, have cautioned the lenders against their exposure to the real estate sector. Plummeting to a 22-quarter low, the lenders are exercising caution for the coming six months.However, sentiments toward the commercial real estate sector have remained steady, with the outlook for the new office supply strong for the coming six months, with 82% of the respondents believing that the coming six months will see new supply additions across the major office markets in the country.“Instead of incremental small steps, it is time for a quantum leap on policy planning and implementation. The Government needs to ensure a stable predictable business friendly environment that not just ensures economic growth but also leads to job creation and income stability,” Sanjay Dutt, MD & CEO, Tata Realty & Infrastructure and Chairman of FICCI Real Estate Committee, said.The outlook for the office leasing activity remains unchanged in Q3 2019, with 79% of the stakeholders opining that leasing activity will remain steady or may even improve in the coming six months mentioned the report.However, real estate developers are pessimistic regarding the revival of the sector in the coming six months, with the future sentiment index score going in the red in Q3 2019 at 47 points, an eight-quarter low, due to liquidity crunch, high borrowing cost due to NBFC crisis, and inventory overhang.