West Asia conflict may push up construction costs by 5%

The ongoing conflict in West Asia is starting to impact India’s real estate sector, with rising material costs and concerns over supply shortages. Industry experts warn that construction costs could increase by around 5% if the situation continues through April.

Developers say that if the conflict continues, it may lead to delays in projects due to a lack of materials and resources.

E Ashok Kumar, President of CREDAI Visakhapatnam Chapter, said the situation is creating a “cost-push” effect in the sector. He noted that crude oil prices have increased from below $70 per barrel in February to over $110–120 in March, while natural gas prices have also risen sharply.

“Costs are already going up for steel, transport, and oil-based materials. If this continues, construction costs may rise in the next one to two quarters. This could also affect property prices,” he said.

He added that the impact could be immediate. “If the conflict continues into April, construction costs may increase by about 5%. Project timelines may also be affected due to a shortage of building materials,” he said.

Kumar also warned that a long conflict could affect the overall economy. Since the real estate sector depends on economic growth, this may lead to slower sales and leasing activity.

On the ground, steel prices have already increased. TMT steel prices have gone up by about 20% in some markets, rising from around ₹62,000 to ₹72,000 per tonne between February and March. Overall, prices have increased by 18–25% in the last two to three months, according to industry sources.

Cement prices have remained mostly stable, with only a small increase of Rs. 50 per bag. However, demand is rising, as seen in a 10.7% growth in cement production in January 2026.

Kumar said developers are closely watching the situation. “Rising costs of energy, steel, and cement are a major challenge for the real estate sector. Our focus is on maintaining stability and transparency,” he said.