Impact of war: construction costs rise, delivery schedules take a hit

The cost of construction materials in Tamil Nadu has increased due to the war in West Asia. | Photo credit: Siva Saravanan S.

As the war in West Asia continues for more than two months now, Tamil Nadu is seeing the real estate sector taking a hit as the completion of projects gets delayed and costs go up.

Achal Sridharan, founder and managing director of CovaiCare, said prices of construction materials have increased by 25% to 40%.

According to Gugan Ilang, president-elect of the Confederation of Real Estate Developers Associations of India, Tamil Nadu, 80% of tile production has stopped in Morbi, Gujarat, affecting the availability of tiles. “We manage with what we have. More than prices, availability of tiles is the main issue,” he said.

This is felt in every store selling tiles in the state. The price of tiles, which was ₹ 65 per piece, is ₹ 79 today and stock is not readily available, said a tile shop owner in Tiruppur.

“Delivery of properties is delayed due to unavailability of tiles,” added Mr. Ilango.

Prices of all PVC products have increased by 20% to 25%. While the price of fuel has gone up by 10%, the downstream industries are raising prices abnormally. “It’s the developers who are getting hit. We can’t increase prices for the supplies we’ve committed to. We’re increasing the cost of new projects. But we can’t pass the entire price increase on to consumers,” he said.

K. Prasad, head of the Coimbatore center of the Builders Association of India, said that on an average, the total cost of construction has increased by at least 5% in the last two months. Plumbing, steel and cement prices have risen over the past month. Any material that is a by-product or based on petroleum has seen a sharp increase in prices, he added.

Demand for real estate in Tamil Nadu is increasing, especially from consumers who are currently in West Asian countries. However, pricing and delivery issues are a major challenge for developers. The Tamil Nadu Real Estate Regulatory Authority should give real estate promoters six to eight months to complete the projects, Mr. Ilango added.

Published – 26 May 2026 19:49 IST