According to a research, the developers are facing delays of 10-20 days for shipments of construction materials, as vessels are being rerouted via longer routes. This has increased shipping costs by Rs 1.5-3.5 lakh per container, adding pressure on ongoing and upcoming projects
An analytical report stated that the construction materials have seen price rise in recent time. Pic/illustration included in the report
The ongoing disruption around the Strait of Hormuz amid the West Asia war is beginning to impact real estate sector in parts of the world including India's financial capital in Mumbai, the industry experts say.
According to a research, the developers are facing delays of 10-20 days for shipments of construction materials, as vessels are being rerouted via longer routes. This has increased shipping costs by Rs 1.5-3.5 lakh per container, adding pressure on ongoing and upcoming projects.
Key construction materials have seen sharp price increases
In an analytical report, Dr. Prashant Thakur, Executive Director & Head - Research & Advisory, ANAROCK Group, stated that the construction materials have seen price rise in recent time. These include -
- Steel prices have risen by around 20 per cent to Rs 72,000 per tonne
- Marine fuel costs have surged to Rs 1 lakh per tonne
- Aluminium prices have climbed to approximately Rs 3.5 lakh per tonne
These increases are pushing up construction costs, with estimates suggesting an additional Rs 50 per sq ft for high-rise buildings. Cities dependent on vertical development, including Mumbai and Delhi, are expected to feel the impact most, the report stated.
Luxury housing faces direct impact
It stated that high-end housing markets, especially in areas such as South Mumbai, Worli, and Bandra-Kurla Complex, are likely to see the strongest effects.
Mumbai remains India’s leading market for ultra-luxury homes priced above Rs 40 crore, accounting for nearly 88 per cent of such sales in 2024. Premium materials like imported marble and fittings have become more expensive due to increased freight and insurance costs.
However, experts believe that luxury buyers may absorb price hikes, with developers expected to increase prices by over 5 per cent.
NRI buyers and market dynamics
Non-resident Indians (NRIs), who contribute significantly to luxury housing demand, may also be affected. Travel disruptions linked to the Gulf situation could delay property visits and purchase decisions, the report stated.
NRIs typically account for 15-22 per cent of high-end housing sales, and up to 30 per cent of total sales value in premium projects, making them a crucial segment.
Wider economic impact
The crisis has also pushed up fuel prices, influencing construction logistics and labour costs. Over the past four years, construction costs in major cities have already risen by nearly 39 per cent, further tightening margins for developers.
Even if the situation improves quickly, experts warn that cost pressures will remain for at least 1-3 months, as shipping backlogs clear and supply chains stabilise.
Outlook for 2026
According to the report, while the disruption may not significantly dent luxury home demand, it is expected to:
- Delay project timelines
- Increase overall construction costs
- Put pressure on mid-range housing affordability
The situation has highlighted the need for stronger domestic supply chains and reduced reliance on imports for critical construction materials.
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