West Asia Conflict Shakes Indian Real Estate! Construction Costs Rise as Luxury Housing Faces New Pressure
India’s real estate sector has started feeling the heat of the ongoing West Asia conflict. What initially looked like a distant geopolitical issue has now begun impacting construction activity, material supply, labour costs, and project planning across the country. From rising aluminium and glass prices to increasing transportation expenses and labour shortages, developers now face multiple challenges at the same time. Recently, Vikas Oberoi, Chairman and Managing Director of Oberoi Realty, openly discussed these concerns during the company’s Q4 FY26 earnings call.
According to him, the pressure has become visible across the entire industry. However, despite the rising costs, the company still plans major luxury launches in Mumbai and Gurugram.
Global Tensions Start Impacting Indian Realty
The real estate sector depends heavily on global markets. Therefore, international conflicts often affect construction and infrastructure faster than expected.
The ongoing West Asia conflict has increased fuel and energy prices globally. Consequently, transportation costs have moved upward. Manufacturing expenses have also climbed sharply. As a result, developers now pay more for raw materials and project execution.
Vikas Oberoi explained that the company has already noticed higher prices for aluminium, glass, and energy-related inputs. Simultaneously, labour costs have also increased. Moreover, developers now face delays in material availability due to supply chain disruptions.
Although the estimated rise currently stands at around 2% to 3%, industry experts believe costs could rise further if geopolitical tensions continue for a longer period.
Construction Costs Continue Rising
Construction forms the foundation of every real estate project. Therefore, even a small increase in costs directly affects project budgets and profitability.
Today, developers already manage expensive land acquisition, higher financing costs, approval delays, and changing market dynamics. Now, global instability has created another major challenge.
According to Oberoi, the company had already built contingency reserves into its project planning. Because of this strategy, the current rise in expenses may not immediately impact profitability.
However, he admitted that these contingency buffers are slowly getting consumed. Therefore, developers may eventually revise pricing strategies to maintain healthy margins.
Additionally, companies have already started factoring future cost increases into upcoming projects. This trend may gradually increase property prices, especially in the luxury housing segment.
Luxury Housing Market Still Remains Strong
Interestingly, India’s luxury real estate market continues showing strong momentum despite global uncertainty.
Affluent buyers still prefer premium residences with larger layouts, better amenities, branded experiences, and exclusive locations. Consequently, luxury developers continue witnessing healthy demand across major cities.
Oberoi Realty’s latest numbers clearly reflect this trend. The company recorded pre-sales worth ₹5,447 crore during FY26 compared to ₹5,281 crore in the previous financial year.
This growth highlights strong buyer confidence in premium housing markets like Mumbai, Gurugram, Bengaluru, and Delhi-NCR.
Furthermore, wealthy investors often consider luxury real estate a stable asset during uncertain economic conditions. Therefore, many buyers continue investing aggressively in premium properties.
Oberoi Realty Plans Massive Launches in FY27
Despite rising construction pressure, Oberoi Realty continues expanding aggressively across multiple markets.
The company plans several launches during the first quarter of FY27. These include projects at Carter Road, Malabar Hill, Thane, and Gurugram.
Among them, the upcoming “Three Sixty North” project in Gurugram has already generated huge excitement in the luxury housing market.
According to Vikas Oberoi, the project will mirror the company’s iconic “Three Sixty West” development in Mumbai. The apartments will reportedly exceed 5,000 square feet and may even cross 8,000 square feet.
Such ultra-luxury residences target India’s growing billionaire and ultra-high-net-worth segment.
Interestingly, the company has not disclosed pricing details yet. However, market experts expect extremely premium pricing because of the project’s luxury positioning and growing demand in Gurugram’s high-end housing market.
Additionally, Oberoi Realty has already started preparing the show apartment at the project site, signaling strong confidence ahead of launch.
RLDA Commercial Project Could Become a Landmark Development
Another major highlight from the earnings call involved Oberoi Realty’s commercial project planned on RLDA land in Bandra East.
Earlier this year, the company emerged as the highest bidder for the 11-acre land parcel with a massive bid of approximately ₹5,400 crore.
Now, the developer plans to build a large commercial project on the site. However, instead of relying entirely on leasing income, the company may adopt a strata-sale strategy.
This model could improve cash flow while also attracting corporate buyers looking for premium standalone office spaces in Mumbai.
Moreover, Vikas Oberoi revealed that several large business groups have already shown strong interest in the project.
Rising Costs May Push Property Prices Higher
As construction costs continue climbing, developers may gradually transfer part of the burden to buyers.
This situation could lead to further property price appreciation across premium housing markets in Mumbai, Gurugram, and other metro cities.
Simultaneously, luxury developers may focus more aggressively on high-end housing segments where profit margins remain stronger.
Additionally, many buyers may accelerate purchasing decisions before future price hikes arrive. Therefore, the next few quarters could become extremely important for both developers and investors.
Sanjeev Singh, MD SKJ Landbase, Shares His Perspective
Sanjeev Singh, Managing Director of SKJ Landbase, believes that global geopolitical developments now influence Indian real estate more directly than ever before.
According to him, rising construction costs and supply chain disruptions may temporarily pressure developers. However, strong demand in India’s premium and luxury housing sector will continue supporting long-term market growth.
He further stated that financially strong developers with efficient planning and premium project positioning will remain resilient during global uncertainty. Moreover, he believes cities like Gurugram and Mumbai will continue attracting ultra-luxury investments because affluent buyers still consider real estate a secure long-term asset.
Final Thoughts
The ongoing West Asia conflict has undoubtedly started impacting India’s real estate industry. Rising material costs, expensive labour, and supply chain challenges have created fresh pressure for developers across the country.
Nevertheless, India’s luxury housing market continues showing remarkable resilience. Developers like Oberoi Realty still plan ambitious launches while carefully adjusting their pricing and budgeting strategies.
If global tensions continue, property prices may rise further in premium markets. Yet, strong buyer confidence, urban wealth growth, and increasing demand for luxury living could keep India’s high-end real estate sector moving forward strongly in 2026.
