Knight Frank–NAREDCO Index Signals Cautious Real Estate Outlook
Real Estate

Knight Frank–NAREDCO Index Signals Cautious Real Estate Outlook

India’s real estate sector entered a phase of cautious recalibration in Q1 2026, with the Knight Frank–NAREDCO Real Estate Sentiment Index reflecting moderation in stakeholder confidence amid rising global uncertainties.

The Current Sentiment Score declined sharply to 49 in Q1 2026 from 60 in Q4 2025, slipping into pessimistic territory, while the Future Sentiment Score moderated to a neutral 50 from 61 in the previous quarter. According to the report, higher crude oil prices, inflationary pressures, tighter financial conditions and geopolitical uncertainties weighed on sentiment across the sector.

The residential market showed signs of consolidation after a prolonged growth cycle. Around 52 per cent of respondents expect housing sales to decline in the near term, while 45 per cent foresee lower project launches. However, residential prices are expected to remain firm, with 73 per cent of stakeholders anticipating prices to either rise or stay stable due to higher construction, labour and financing costs.

The office segment remained resilient, supported by strong leasing demand and limited Grade A supply. About 41 per cent of respondents expect office leasing activity to improve, while 81 per cent foresee rentals remaining stable or increasing, driven largely by demand from Global Capability Centres.

Commenting on the findings, Shishir Baijal said the moderation in sentiment reflects growing global uncertainties, while India’s core economic fundamentals remain robust.

Praveen Jain added that the softening in residential sentiment represents a short-term recalibration after a sustained growth phase, while commercial real estate continues to demonstrate strength through stable leasing and rental trends.

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India’s real estate sector entered a phase of cautious recalibration in Q1 2026, with the Knight Frank–NAREDCO Real Estate Sentiment Index reflecting moderation in stakeholder confidence amid rising global uncertainties.The Current Sentiment Score declined sharply to 49 in Q1 2026 from 60 in Q4 2025, slipping into pessimistic territory, while the Future Sentiment Score moderated to a neutral 50 from 61 in the previous quarter. According to the report, higher crude oil prices, inflationary pressures, tighter financial conditions and geopolitical uncertainties weighed on sentiment across the sector.The residential market showed signs of consolidation after a prolonged growth cycle. Around 52 per cent of respondents expect housing sales to decline in the near term, while 45 per cent foresee lower project launches. However, residential prices are expected to remain firm, with 73 per cent of stakeholders anticipating prices to either rise or stay stable due to higher construction, labour and financing costs.The office segment remained resilient, supported by strong leasing demand and limited Grade A supply. About 41 per cent of respondents expect office leasing activity to improve, while 81 per cent foresee rentals remaining stable or increasing, driven largely by demand from Global Capability Centres.Commenting on the findings, Shishir Baijal said the moderation in sentiment reflects growing global uncertainties, while India’s core economic fundamentals remain robust.Praveen Jain added that the softening in residential sentiment represents a short-term recalibration after a sustained growth phase, while commercial real estate continues to demonstrate strength through stable leasing and rental trends.

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