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Real estate developers across India have started experiencing supply disruptions in key construction materials due to ongoing geopolitical tensions in West Asia, according to industry bodies CREDAI and NAREDCO. While construction activity remains largely stable, shortages of materials such as steel, PVC products, wires, pipes and glass are being reported, alongside pressures in ceramic manufacturing hubs. Developers have indicated that prolonged disruptions could lead to higher input costs, project delays and potential increases in housing prices. The sector, which recorded housing sales of 6.14 lakh units across top cities last year with a total value of INR 8.46 lakh crore, may face pricing pressures if global volatility continues.
Real estate developers in India have begun to face supply-side pressures in the past week as ongoing geopolitical tensions in West Asia start affecting the availability and pricing of key construction materials, industry bodies have indicated. Representatives from the Confederation of Real Estate Developers' Associations of India (CREDAI) and the National Real Estate Development Council (NAREDCO) stated that while overall construction activity remains stable, early signs of disruption are emerging across supply chains. Advertisement
Developers have reported shortages in essential materials including steel, PVC products, electrical wires, pipes and glass. These constraints are linked to broader global energy volatility and logistics challenges triggered by the ongoing conflict in the Gulf region. Industry representatives noted that certain manufacturing clusters in India are also experiencing indirect impacts due to fuel supply constraints.
CREDAI National President Shekhar Patel indicated that the sector continues to operate without significant disruption at present, as most primary raw materials are domestically produced. However, he pointed out that temporary supply chain issues have begun to surface due to fluctuations in global energy markets. He further explained that industrial clusters such as Morbi in Gujarat, a key hub for tiles and ceramics, are facing short-term operational challenges driven by increased fuel costs and logistics pressures. According to him, these issues remain transitional but could influence input costs if the situation persists over a longer duration.
NAREDCO President Parveen Jain also highlighted that the effects of the geopolitical situation are becoming visible within the real estate sector, particularly through rising material costs and supply shortages. He noted that segments such as ceramic manufacturing have been affected due to fuel-related constraints, while shortages across multiple construction inputs could impact project execution timelines.
Industry bodies have cautioned that a prolonged period of disruption may lead to a sustained increase in construction costs. Developers are currently attempting to absorb part of the cost escalation; however, continued pressure may eventually be reflected in property pricing. This could have implications for both ongoing and upcoming residential projects, particularly in segments where margins are already under strain.
In addition to cost pressures, developers have raised concerns about potential delays in project completion timelines if supply constraints intensify. Any slowdown in material availability could disrupt construction schedules, especially for projects nearing key delivery milestones.
Market data indicates that housing sales across the top 50 cities declined by 3 per cent in volume terms to 6.14 lakh units last year, although the total value of sales increased by 16 per cent to INR 8.46 lakh crore. This suggests that while demand remains resilient in value terms, rising costs could influence pricing dynamics going forward.
Industry stakeholders have indicated that stability in global energy markets and easing of geopolitical tensions will be critical to maintaining cost balance and ensuring continuity in construction activity. In the interim, developers are expected to monitor supply conditions closely and adjust procurement strategies to manage risks associated with material availability and pricing volatility.
Source - PTI
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