India's Real Estate Market Shows Resilience in Q2 2026
India's real estate market has demonstrated remarkable resilience in the second quarter of 2026, with sentiment stabilizing despite persistent global economic headwinds. A new report, the 49th edition of the Knight Frank-NAREDCO Real Estate Sentiment Index for Q2 2026 (April-June 2026), reveals that the Future Sentiment Score held steady at 50, marking a significant halt to the sharp decline observed in the previous quarter.
While the Current Sentiment Score dipped marginally to 48, placing it in the pessimistic zone due to external pressures like geopolitical tensions, volatile energy prices, and global inflationary trends, the overall outlook remains cautiously optimistic. Shishir Baijal, International Partner, Chairman, and Managing Director of Knight Frank India, noted the sector's navigation through a complex global environment, emphasizing that the leveling off of the previous quarter's decline and steady future sentiment are key takeaways.
Office Sector Anchors Market Confidence
The office market continues to be the primary driver of confidence within the Indian real estate sector. Despite broader macroeconomic uncertainties, office transactions reached an impressive 48 million square feet during the first half of 2026. This represents only a minor 2% year-on-year drop, especially notable given last year's exceptionally high base.
Occupier demand is primarily fueled by expansion activities from Global Capability Centres (GCCs), technology firms, and other corporate entities. Stakeholder confidence in this segment remains constructive, with a significant majority expecting stability or improvement:
- 74% anticipate stable or improved leasing volumes.
- 76% foresee stable or improved completions.
- 81% project firm or rising rents over the next six months.
Residential Market Enters Consolidation Phase
Meanwhile, the residential market is transitioning into a mature consolidation phase after several years of sustained growth. Housing sales across India's top markets saw a 1% year-on-year increase in H1 2026. Although caution persists, the degree of pessimism has moderated, with the proportion of respondents expecting weaker demand falling to 45% from 52% in Q1 2026.
Property prices are also showing resilience, with 74% of respondents expecting them to remain stable or increase, supported by ongoing input cost pressures. Shri Parveen Jain, National President of NAREDCO, commented, “The future score, however, holds firm at the neutral threshold of 50 — a signal that stakeholders see the challenges persisting rather than deepening, and that the sharp decline of the previous quarter has levelled off.”
Capital Sentiment Rebounds and Broader Economic Outlook
Across various regions, sentiment largely hovered near the neutral mark. The North Zone experienced a modest recovery to 52, attributed to robust commercial activity, while the West Zone recorded a score of 50. The South and East Zones remained cautious as stakeholders continued to monitor evolving economic conditions.
The outlook for capital availability showed positive shifts. Sentiment among non-developer stakeholders, including banks, financial institutions, and private equity investors, improved to 53 in Q2 2026 from 50 in the previous quarter. Developer sentiment, however, held flat at 51. Regarding the broader economy, the share of respondents expecting conditions to worsen decreased significantly to 36% from 50% in Q1 2026, with half of the respondents expecting funding conditions to remain unchanged.