Real Estate Sector Cautious Till Sep: Knight Frank-Naredco

New Delhi, May 5 (PTI) Real estate developers and financial institutions are embracing a "cautious recalibration" approach towards the realty sector prospects at least till September due to global uncertainties, according to Knight Frank and NAREDCO.

Real estate consultant Knight Frank and realtors' body NAREDCO on Wednesday released 'Real Estate Sentiment Index Q1 2026 (January-March 2026)' which pointed out a "notable departure from the sustained optimism in recent years in stakeholder sentiment".

The current sentiment score declined sharply to 49 during January-March this year from 60 points in Q4 2025, slipping into pessimistic territory.

"The Future Sentiment Score stands at a neutral 50 points, also recording a decline from 61 points in Q4 2025," it said, adding that the sentiment has "entered a phase of cautious recalibration".

The sentiment index is based on the survey of supply-side stakeholders like developers, investors and financial institutions. A score of above 50 indicates "optimism" in sentiments, a score of 50 means the sentiment is "same" or "neutral". The score below 50 indicates "pessimism".

The Knight Frank-Naredco report mentioned that the moderation in sentiment is largely driven by global macroeconomic volatility.

"Elevated crude oil prices have intensified inflationary trends, impacting construction and logistics costs, affecting project viability. At the same time, tighter financial conditions have led stakeholders to adopt a cautious stance," Knight Frank and Naredco said.


India's economic fundamentals remain largely stable, still geopolitical conditions are beginning to influence real estate demand and supply dynamics, they added.

Naredco President Praveen Jain said, "Real estate sentiment has moderated amid global macroeconomic headwinds and inflationary pressures; however, this reflects short-term caution among stakeholders rather than any weakening in the residential market's underlying strength."

As global uncertainties ease, the residential segment is expected to regain momentum and sustain its growth trajectory, Jain added.

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said, "The moderation in sentiment reflects the growing influence of global uncertainties, particularly energy market disruptions and geopolitical tensions."

"While India's economic fundamentals remain robust, the real estate sector is entering a phase of cautious recalibration," he added.

Baijal noted that the housing segment is witnessing a natural moderation after a strong growth cycle, while the office market continues to exhibit resilience driven by strong occupier demand.

"In the near term, stakeholders are likely to remain in a wait-and-watch mode as they assess the evolving macroeconomic environment," he added.