India’s real estate sector is beginning to feel the ripple effects of the ongoing conflict involving the US, Israel and Iran, with rising input costs and supply disruptions posing fresh challenges to developers.
According to Parveen Jain, president of National Real Estate Development Council (NAREDCO), the impact is already visible across construction supply chains. “Ceramic units in Gujarat and other states have shut down due to fuel shortages, and this will inevitably affect construction activity,” he said in an interaction with Fortune India.
Developers are also grappling with increasing prices of key materials such as steel, PVC products, wires, pipes and glass. Industry experts warn that if the conflict persists, cost pressures could intensify further, potentially slowing down project execution timelines.
The sector had entered the year with optimism, particularly after a Union Budget that emphasised affordable housing and the development of tier-II and tier-III cities. However, escalating geopolitical tensions have tempered expectations, introducing uncertainty into what was seen as a recovery phase.
Beyond global factors, domestic challenges continue to weigh heavily—especially rising land costs. Jain noted that land prices in metro cities have surged significantly over the past three to four years, pushing up overall property prices. “Buyers tend to hesitate when they see sharp price increases over a short period, but both land and construction costs have gone up,” he explained.
While demand for affordable housing remains strong, high land costs are slowing project rollouts. Industry bodies are now in discussions with the government to explore policy interventions, including the possibility of land support or public-private partnership (PPP) models to make such projects more viable.
At the same time, regulatory reforms are seen as a positive development. The implementation of Real Estate (Regulation and Development) Act, 2016 (RERA) has significantly improved transparency and accountability in the sector, helping restore buyer confidence.
NAREDCO, established under the Ministry of Housing and Urban Affairs, continues to act as a bridge between policymakers and the industry. As global uncertainties persist, stakeholders say coordinated policy support will be crucial to sustaining momentum in India’s real estate growth story.
