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Informist, Friday, Jun. 19, 2026

 

By Astha Oriel and Shakshi Jain 

 

NEW DELHI – Real estate prices in the country are likely to rise by 10-15% this year due to the inflationary pressure stemming from the supply chain challenges triggered by the West Asia war, Niranjan Hiranandani, chairman of the Hiranandani Group and the National Real Estate Development Council, told Informist Friday. 

 

"I think 10-15% increase in prices is bound to take place because of inflation," Hiranandani said, adding that developers are already seeing a 10-15% escalation in cost. Hiranandani pointed out that realty projects are likely to face a delay of about six months due to the supply chain issues that occurred after the breakout of hostilities in West Asia.

 

"This war has caused a lot of problems. There is no material supply. Many ceramic factories in Gujarat were closed. They were closed for three months. So, naturally, there was no supply. Orders were not being completed. They were given money in advance. So, in my opinion, overall, every project will take six months (more to finish)," Hiranandani said, urging the government and the real estate regulatory authority to allow extension of project timelines by six months.

 

The prices of construction materials have increased by 20-25% since the beginning of the West Asia war, Parveen Jain, president, National Real Estate Development Council told Informist.

"Developers are bound to take a hit in their margins due to escalating costs for the already launched projects because of the Real Estate (Regulation and Development) Act", Jain pointed out. Once the builder-buyer agreement is registered, the mutually agreed-upon price is locked and legally binding under the Real Estate (Regulation and Development) Act guidelines.

 

In Jan-Mar, the residential housing market in India shrank 4% on year to 84,827 units, according to a report released by real estate consultant Knight Frank in April. "The residential market is showing early signs of recalibration after a prolonged period of strong performance. Sales have moderated and the gap between launches and absorption has widened, indicating a more cautious demand environment. Importantly, this moderation is occurring alongside continued price appreciation, which is beginning to test affordability and impact volume growth," Shishir Baijal, chairman and managing director, Knight Frank India had said in the report.

  

Amidst the West Asia crisis, the prices of key construction materials such as steel, cement, and ceramics, among others, have gone up significantly. In addition, the disruption in supply of fuel due to the closure of Strait of Hormuz, has also adversely affected construction activity. As opposed to the commonly believed notion that the affordable housing market is shrinking due to unviable margins for developers in the segment, Hiranandani presented a contrasting opinion. "Affordable housing is not working because the inflation cost is so high. The affordable sector is not buying....There are builders who are doing only affordable housing. But now there is neither the market nor the affordability," he said, advocating for higher focus on the rental housing market as a solution.

 

In Jan-Mar, the sales of affordable homes, which are priced less than INR 5 million, shrank by 23% on year to 16,273 units, as per the Knight Frank report.

 

Hiranandani noted that the private sector players and the government should together come up with a solution to boost affordable housing sales. "When there was COVID-19, we came up with a solution, where the government took a 50% reduction in stamp duty and development charges. When we did all this, the number of affordable housing increased. So, I think the whole country should think about this," Hiranandani pointed out. 

 

A joint report by KPMG-NAREDCO released Friday recommended expanding land availability, raising permissible floor area ratio, streamlining approvals through single-window systems, improving access to low-cost finance, and offering targeted tax incentives, to increase affordable housing supply for economically weaker sections, and low-income groups. End

 

Edited by Deepshikha Bhardwaj

 

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