India's real estate sentiment has significantly declined, with the Knight Frank-Naredco Real Estate Sentiment Index reporting a score of 49 for Q1 2026, down from 60 in Q4 2025. This shift into pessimistic territory is attributed to rising global uncertainties, including elevated crude oil prices and geopolitical tensions, which have heightened inflationary pressures and impacted construction costs. The future sentiment score also fell to 50, indicating a cautious outlook among stakeholders. Despite the moderation in the residential segment, where 52% of respondents anticipate a drop in housing sales, the office leasing market remains robust, achieving a record high in activity. The report indicates that while residential prices are expected to remain stable or rise, the overall sentiment reflects a wait-and-watch approach as stakeholders navigate the evolving macroeconomic landscape. The funding outlook is also cautious, with a significant portion of respondents expecting tighter liquidity conditions.