Mumbai: India’s real estate sector is entering a phase of stabilisation despite ongoing global economic uncertainties, according to the latest Knight Frank–NAREDCO Real Estate Sentiment Index for Q2 2026. While the Current Sentiment Score eased marginally to 48 from 49 in the previous quarter, the Future Sentiment Score remained steady at 50, indicating that market participants expect conditions to stabilise rather than deteriorate further.
The report attributes the moderation in sentiment to geopolitical tensions, inflationary pressures and volatile energy prices. However, India’s resilient domestic economy, steady occupier demand in the office sector and improving stakeholder confidence continue to support the market’s long-term outlook.
Developer sentiment remained unchanged at 51 during the quarter, while non-developer stakeholders, including banks, financial institutions and private equity investors, recorded an improvement in confidence, with sentiment rising to 53 from 50 in the previous quarter.
The residential market is witnessing a gradual normalisation after several years of strong growth. Housing sales across India’s top markets increased by 1% year-on-year during the first half of 2026, while expectations of further weakening in demand declined, indicating improving market stability. At the same time, nearly three-fourths of respondents expect residential prices to remain stable or rise over the next six months.
The office segment continues to outperform other real estate sectors. Office transactions reached 48 million square feet in H1 2026, supported by sustained leasing demand from Global Capability Centres (GCCs), technology companies and diversified corporate occupiers. Around 74% of stakeholders expect leasing activity to remain stable or improve, while 81% believe office rentals will either remain steady or increase in the coming six months.
The report also highlights improving confidence in the broader economy, with fewer stakeholders expecting economic conditions to worsen compared to the previous quarter. India’s position as the world’s fastest-growing major economy continues to provide confidence despite global headwinds.
Knight Frank–NAREDCO concludes that while current market sentiment remains cautious, the sector’s strong fundamentals, continued urbanisation and resilient office market position Indian real estate for sustained long-term growth.