AHMEDABAD: The ongoing conflict in West Asia is beginning to impact Gujarat’s real estate market, leading to a slowdown in redevelopment projects due to increasing construction costs and labor shortages.
Industry sources report that many redevelopment negotiations have been stalled as developers reevaluate financial feasibility in light of rising costs. The surge in raw material prices resulting from the conflict has made previous offers untenable, exacerbated by labor shortages that are affecting project timelines.
According to Ankur Desai, secretary of CREDAI Ahmedabad, the West Asia war has disrupted the supply of crude-related construction materials, complicating project execution and financial planning. “Materials such as cement, steel, PVC pipes, and aluminum have seen significant price increases in the last two months, with no long-term price guarantees,” he stated.
Jitendra Shah, president of the Urban Redevelopment Housing Society Welfare Association, noted that this year has seen a considerable decline in redevelopment activity. “So far in 2026, around 30 memorandums of understanding have been signed, and discussions with nearly 100 housing societies have slowed down. Builders are taking more time to reach decisions as previous offers have lost their viability,” he explained.
Shah also pointed out that construction costs have risen almost 20% since the onset of the conflict, leading developers to pause rather than completely abandon projects in anticipation of better demand. However, some long-stalled negotiations, especially those lasting over three years, have already been canceled.
In Ahmedabad, 150 redevelopment projects have been completed, with 40 to 50 delivered just in the past year. Yet these developments now face a 25% unsold inventory, which adds to market apprehension.
Developers indicate that the surplus unsold units are heightening competition, making it challenging to manage increased input costs while trying to offer appealing terms to housing societies. “The cost pressures are becoming more pronounced,” said city developer Kartik Soni. “There’s tough competition, and while redevelopment previously gained momentum, many projects still carry unsold inventory. If raw material prices remain high, the cost of new launches will escalate.” He also noted that higher prices for new projects could lead buyers to opt for existing inventory priced at earlier rates, potentially helping to clear the surplus.
