Stakeholder sentiment in India’s real estate sector turned cautious in the first quarter of 2026 due to global economic uncertainties, as per a report by Knight Frank and NAREDCO. The Current Sentiment Score dropped to 49 from 60, while the Future Sentiment Score shifted to a neutral 50 from 61. This index reflects views on economic conditions and funding availability from the supply side and financial institutions.
The decline in sentiment is primarily attributed to global economic volatility, with high crude oil prices leading to inflationary pressures affecting construction and logistics costs, impacting project feasibility. Despite India’s stable economic fundamentals, geopolitical factors are starting to influence real estate demand and supply patterns.
Residential activity in India exhibited signs of adjustment after a prolonged growth phase, with sales and new launches moderating in Q1 2026. The report anticipates a further softening in demand in the short term, even as property prices remain steady or rise. This disparity between weakening demand and resilient prices underscores the current market’s structural cost challenges.
Around 52% of respondents foresee a decrease in housing sales, while 73% expect prices to either rise or remain stable due to escalating material, labor, and loan expenses. The report emphasizes that rising structural costs are the key drivers shaping the residential market, leading to a divergence between demand sentiment and pricing expectations.
Praveen Jain, National President of NAREDCO, stated that the moderation in real estate sentiment is a result of global economic headwinds and inflationary pressures, reflecting short-term caution rather than weakness in the market’s core strength. He described the recent softening in residential sentiment as a natural adjustment following sustained growth, with end-user demand and consistent price appreciation supporting market resilience.
The report highlighted that nearly half of the stakeholders anticipate fewer new project launches in the near future. Conversely, the office segment outlook remains positive, with 41% of respondents foreseeing an uptick in leasing demand. Similarly, expectations for office supply are optimistic, with almost half of the stakeholders anticipating increased completions, while others expect stable or reduced supply.
