New Delhi, May 6 (BNP): India’s real estate sector witnessed a shift toward cautious sentiment in the first quarter of 2026, influenced by global economic uncertainty and rising cost pressures, according to a joint report by Knight Frank and NAREDCO.

The report noted a decline in stakeholder confidence, with the Current Sentiment Score dropping to 49 from 60, while the Future Sentiment Score eased to a neutral level of 50 from 61. The index reflects the outlook of developers, investors, and financial institutions on economic conditions and funding availability.

The moderation in sentiment has been largely attributed to global macroeconomic volatility, including rising crude oil prices, which have increased construction, logistics, and financing costs—impacting overall project viability.

Despite stable domestic economic fundamentals, geopolitical factors are beginning to influence both demand and supply dynamics in the sector.

The residential segment showed signs of slowing after a sustained growth phase, with moderation in both housing sales and new project launches during the quarter. Around 52 per cent of stakeholders expect housing sales to decline in the near term. However, 73 per cent believe property prices will either remain stable or continue to rise, driven by higher input and borrowing costs.

This divergence between softening demand and firm pricing underscores the structural cost pressures shaping the housing market.

Meanwhile, nearly half of respondents anticipate a slowdown in new project launches. In contrast, the office segment remains relatively resilient, with 41 per cent of stakeholders expecting improved leasing demand.

Industry experts described the current phase as a short-term recalibration rather than a fundamental slowdown, noting that end-user demand and steady price trends continue to support the sector’s long-term outlook.