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West Asia Conflict Fuels India Real Estate Cost Surge
1 Apr
Summary
- Real estate sector faces rising material prices due to conflict.
- Construction costs may surge by 5% if hostilities continue.
- Steel prices have jumped significantly, impacting input costs.
The ongoing West Asia conflict is beginning to influence India's real estate sector by increasing material prices. Industry experts warn that construction costs could rise by as much as 5% if the conflict continues into April, potentially affecting construction schedules due to shortages.
Harshavardhan Neotia, Chairman of Ambuja Neotia Group, noted a "classic cost-push cycle" driven by spikes in crude oil and natural gas prices. This pressure is evident in steel, logistics, and petrochemical-linked materials. Sushil Mohta, President of CREDAI West Bengal, highlighted that a prolonged conflict could dampen the broader Indian economy, negatively impacting real estate sales and leasing.
On the ground, construction steel prices have surged approximately 20% between February and March 2026. While cement prices have remained relatively stable, demand pressure is building. ICRA has flagged geopolitical tensions as a key factor pressing on bitumen prices, expected to weigh on construction companies' operating profitability in FY2025-26 and FY2026-27.
