Real estate stakeholders turn cautious amid global uncertainty: Report

Knight Frank-Naredco Q1 2025 report shows real estate sentiment index dipped amid global volatility, though office market and premium housing stay resilient

Indian real estate stakeholders have turned cautious amid global trade tensions, economic recalibration and regional volatility, according to the Knight Frank-Naredco Real Estate Sentiment Index report for the January–March 2025 period.

 

The stakeholders include developers, banks, financial institutions and private equity funds.

 

The sentiment score in Q1 CY25 declined to 54 from 59 in Q4 CY24, while the future sentiment score eased to 56, compared to 59 in the previous quarter.

 

Hari Babu, President, Naredco, said: “While the Knight Frank Q1 2025 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 report gauges both current and future sentiment towards the real estate sector, as well as views on the broader economy and funding availability as perceived by supply-side stakeholders and financial institutions. A score of 50 denotes a neutral view; above 50 suggests positive sentiment, while below 50 indicates negative sentiment.

 

According to the survey, the residential outlook leaned towards stability, with cautious launch plans. In Q1 CY25, 93 per cent of stakeholders expected residential prices to remain stable or improve, and 67 per cent anticipated stability or growth in new launches.

 

However, residential sales sentiment moderated. Only 50 per cent of respondents expected sales to improve or remain steady in Q1 CY25, compared to 88 per cent in the same quarter last year.

 

Meanwhile, the office segment continued to perform well, buoyed by robust leasing activity and stable rental growth. In Q1 CY25, 82 per cent of stakeholders expected office leasing volumes to remain steady or rise, while 91 per cent anticipated office rents to remain stable or increase.

 

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said: “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.”

 

In Q1 2025, only 55 per cent of stakeholders expected economic momentum to improve or remain stable, down sharply from 91 per cent in the same period last year.

 

This moderation reflects concerns over global trade volatility and recent cross-border developments. However, the Reserve Bank of India’s consecutive repo rate cuts in February and April are expected to support consumption and investment, the report said.

 

Funding sentiment remained largely steady, with 79 per cent of stakeholders expecting fund availability to either improve or remain unchanged. Of this, 35 per cent foresee improved access—slightly lower than the previous quarter.