India, May 6 -- Real estate developers and financial institutions are turning cautious, marking a clear break from recent optimism, with a guarded outlook for the sector at least until September amid global uncertainties. Volatility, elevated crude oil prices driving inflation and construction costs, and tighter financing conditions are weighing on sentiment. Geopolitical risks are increasingly shaping demand and supply despite stable domestic fundamentals, according to the Q1 2026 Real Estate Sentiment Index released by Knight Frank and NAREDCO.

Regionally, sentiment has softened across all zones compared to the previous quarter. The North and South regions slipped into pessimistic territory, while the West zone remained relatively resi...