The November 8 announcement of the government to demonetise high value currency notes of Rs 500 and Rs 1000 has dampened sentiments of the real estate sector across India, which until now had been comparably more upbeat than most markets in Asia. Both the Occupier Sentiment Index (OSI – an index that shows supply, demand and rent expectations) and Investment Sentiment Index (ISI – an index capturing overall market momentum) readings turned negative in the National Capital Region and Mumbai after demonetisation, according to RICS’ Global Commercial Property Monitor.
The OSI index recorded a reading of -3 in the Q4 (October-December, 2016). It represents the weakest number reported for this indicator since the end of 2013. Demand for retail property fell over this period. Office space was more sought after though the rate of demand growth appears to be moderating.
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