Ahmedabad: The ongoing conflict in West Asia has started affecting Gujarat’s real estate sector, with redevelopment activity witnessing a slowdown due to rising construction costs and labour shortages.

Industry stakeholders said several redevelopment negotiations across the state have been stalled as developers reassess project viability amid escalating input costs. The sharp rise in raw material prices following the conflict has made many previously negotiated offers financially unviable, while labour shortages due to summer vacations have further delayed project execution.

The conflict has particularly impacted the supply and pricing of crude-linked construction materials, creating uncertainty in financial planning and project timelines across the sector.

According to CREDAI, prices of cement, steel, PVC pipes, waterproofing materials, aluminium sections and aluminium pipes have increased sharply over the past two months, with no long-term price stability in sight.

It is learnt that redevelopment momentum has weakened considerably this year, with discussions involving nearly 100 housing societies slowing down. Developers are taking longer to make decisions as older offers are no longer workable, with construction costs reportedly rising by nearly 20% since the conflict began.

In Ahmedabad, nearly 150 redevelopment projects have been completed so far, including 40 to 50 projects delivered in the past year alone. However, developers said these projects are currently carrying nearly 25% unsold inventory, adding to market caution.

Meanwhile, builders believe that higher prices for upcoming projects could push buyers towards existing inventory available at older rates, helping developers clear unsold stock. DeshGujarat