Construction Costs Spike 25% Amid Regional Conflict

Construction input costs in India have risen by 25% since the West Asia war began in February. NAREDCO president Parveen Jain confirmed this increase during an interview. The spike is driven by a broad rise in raw material prices over the last six months.

Copper prices have climbed 60% in the same period. Jain noted that supply chains will require three months to normalize even after immediate hostilities end. This delay ensures that high input costs will persist beyond the initial conflict.

Residential prices remain stable

Residential property values have not followed the cost increase. Jain stated that current market values already reflect previous adjustments. He predicted no further price changes in the housing sector for the remainder of this year.

Demand for new homes has slowed compared to the previous year. Tulip Group, Jain’s company, has observed this reduction in buyer activity. The market is currently absorbing the shock of higher production expenses.

Long term growth outlook

Real estate firms maintain a bullish stance on India’s sector. They cite a persistent supply shortage against robust residential demand. Industry leaders expect strong growth over the next 10 to 15 years.

Short term crises like the West Asia war currently hinder this trajectory. These events create uncertainty in the immediate market outlook. Developers must navigate these disruptions to sustain long term expansion.

Policy calls for land access

Industry bodies urge the government to subsidize land rates. They propose a public private partnership model for land acquisition. Land costs remain a major component of total development expenses.

These measures aim to facilitate affordable housing construction. Reducing land costs could offset some input price increases. The sector seeks structural support to maintain project viability.