India’s real estate sentiment turns cautious amid global volatility, though office market continues showing strong resilience.
New Delhi
India’s real estate sector has entered a cautious phase in Q1 2026, as global macroeconomic uncertainty and rising costs begin to weigh on sentiment, according to a joint report by Knight Frank and NAREDCO.
The report shows the Current Sentiment Score dropped from 60 to 49, while the Future Sentiment Score eased to a neutral 50 from 61, reflecting moderation in stakeholder confidence across the sector.
Analysts attributed the slowdown in sentiment largely to global volatility, particularly elevated crude oil prices, which have increased construction and logistics costs, affecting project viability and profitability.
Despite stable domestic fundamentals, geopolitical uncertainty and inflationary pressures are beginning to influence both demand and supply dynamics in the real estate market.
The residential segment showed signs of cooling after a strong growth phase, with slower sales and fewer new launches in Q1 2026. Nearly 52 per cent of respondents expect housing sales to decline further in the near term, even as 73 per cent anticipate prices to remain stable or rise due to higher input costs, labour expenses, and borrowing costs.
Industry experts noted that this divergence between weakening demand and firm pricing reflects structural cost pressures rather than a demand collapse. Praveen Jain said the moderation in sentiment is a natural correction after a prolonged expansion cycle, with underlying demand still intact.
However, the office real estate segment remains resilient. Around 41 per cent of stakeholders expect improved leasing demand, while supply is projected to remain stable or increase moderately, supported by continued corporate expansion and hybrid work models.
Overall, the report suggests a short-term cooling in residential momentum, while commercial real estate continues to provide stability to the sector outlook.
