Realty stakeholders' sentiment turns cautious optimistic in Q1 amid global headwinds
Real Estate Sentiment
Index for January-March.
The current sentiment score declined to 54 from 59 in Q4 2024, while the future sentiment score eased to 56, also down from 59. Both metrics, though still in the optimistic zone, reflect rising caution amid
global trade tensions
, regional instability, and broader economic recalibration.
Commercial real estate
continues to underpin
market resilience
, with robust
leasing activity
and steady rental growth supporting positive sentiment. In the first quarter of 2025, around 82% of stakeholders expected leasing volumes to remain stable or increase, while 91% anticipated rents would hold steady or rise—signalling sustained demand and occupier confidence.
The residential segment presents a mixed picture. While 93% of respondents of the survey expected prices to stay stable or increase, only 67% foresee similar trends in new launches. Sentiment on residential sales has notably moderated, with just 50% of stakeholders expecting improvement or stability--down from 88% in the first quarter of 2024.
'Q1 2025 marks a phase of strategic recalibration for the real estate sector, shaped by evolving global trade dynamics, softening consumption, and heightened geopolitical sensitivity. Despite these shifts, India's office market remains resilient, and the continued strength of the premium residential segment affirms the sector's underlying robustness. As macroeconomic indicators adjust, real estate is displaying its capacity to adapt with stability and long-term potential,' Shishir Baijal, CMD,
Knight Frank
India.
These findings, part of the Knight Frank–NAREDCO Real Estate Sentiment Index for Q1 2025, gauge perceptions from developers, lenders, and other supply-side players. A score above 50 signals optimism, while anything below 50 indicates negative sentiment.
'While the Sentiment index shows a marginal decline in both current and future sentiment scores compared to Q4, this slight dip amidst global uncertainties reflects the strength and adaptability of India's real estate sector. The industry continues to move forward with optimism and long-term conviction,' said Hari Babu, president, NAREDCO.
According to him, the Indian real estate sector is showcasing robust performance in the commercial segment, driven by the demand from Global Capability Centres (GCCs) and tech-enabled enterprises — reaffirming India's growing stature as a global business hub. On the residential front, developers are adopting a more mature, demand-led approach by focusing on high-ticket projects while rebalancing supply in the mid and affordable segments.
The developer future sentiment score dropped to 53 in Q1 2025 from 58 in Q4 2024, as developers recalibrate supply strategies amid slowing low to mid ticket size segment demand in the residential sector and rising costs.
The non-developer future sentiment score--including banks, financial institutions, and private equity funds--moderated to 57 from 60, reflecting a wait-and-watch approach on capital deployment, while remaining optimistic on office and high-ticket size residential segments.
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