Association cites supply chain disruptions, labour shortage and escalating project costs; seeks regulatory relief
AHMEDABAD, GUJARAT | 15th JUNE 2026 | Real estate developers in Ahmedabad are set to revise property prices in the coming months due to a sharp increase in construction costs arising from disruptions in global supply chains and labour shortages, CREDAI Ahmedabad said on Monday.
The announcement was made following a special meeting attended by more than 400 developers to assess the impact of rising input costs and ongoing supply chain challenges linked to the conflict in the Middle East.
Rajesh Vaswani, Chairman of CREDAI Ahmedabad, said the geopolitical situation had severely affected the availability of key construction materials, leading to significant cost increases across the sector.
“The conflict in the Middle East has disrupted supply chains for essential construction materials, resulting in unprecedented price increases and putting substantial pressure on the real estate industry. Rising input costs have significantly increased project expenditure and created serious challenges for developers,” he said.
He further added that, apart from the above-mentioned increase, construction activities have slowed down due to the non-availability of sufficient raw materials on time. As a result, employment opportunities for labourers have declined significantly. Additionally, despite the completion of elections in other states, many migrated workers have not returned from their native places, leading to a severe shortage of labour.Delays in the availability of raw materials and labour constraints are extending project schedules, making timely delivery increasingly difficult for developers.
Highlighting the regulatory challenges faced by the industry, the CREDAI Ahmedabad Chairman pointed out that developers are required under the Real Estate (Regulation and Development) Act (RERA) to deliver projects within stipulated timelines, with penalties applicable for delays.
“As developers face escalating costs and project execution challenges, the financial pressure on the industry continues to mount from multiple directions,” he added.
Aalap Patel, President of CREDAI Ahmedabad, said the association had sought to shield homebuyers from the immediate impact of rising costs by deferring any price revisions until the end of June.
“With the expectation that global conditions would stabilise and extraordinary pressures on the real estate sector would ease, our members collectively decided not to increase property prices until June 30,” he said.
He said CREDAI Ahmedabad had issued public notices in leading newspapers on May 15 advising prospective buyers to complete their residential or commercial property purchases before the end of June. The initiative received a positive response from homebuyers and investors, he said, while noting that the sustained increase in construction costs had left developers with limited options.
“The steep rise in construction costs is a consequence of global developments and not the result of any domestic industry decision. Given the steep and sustained increase in raw material prices, developers now have little alternative but to revise property prices,” the CREDAI Ahmedabad President said.
He, however, added that Ahmedabad continues to offer relatively affordable housing compared with other major Indian cities and that developers in the city generally operate on modest margins.
“Ahmedabad developers have absorbed substantial cost increases for as long as possible. However, continuing to bear the burden of sharply rising input costs is no longer commercially sustainable,” he said.
The association emphasised that increase in property prices would be implemented gradually to minimise the financial impact on homebuyers.
“Our objective is to ensure that citizens are not subjected to a sudden and excessive financial burden. We have therefore advised members to adopt a phased and responsible approach to any necessary price revisions,” he added.
He emphasised that the current situation is beyond the control of developers.
“The steep escalation in construction costs is the result of global circumstances rather than any domestic industry decision. Given the sustained increase in raw material prices, developers now have little alternative but to revise property prices,” he said.
He further said that housing prices in Ahmedabad remain comparatively affordable when compared with other major Indian cities, while developers in the city generally operate on relatively modest margins.
“Ahmedabad developers have absorbed substantial cost increases for as long as possible. However, continuing to bear the burden of sharply higher input costs is no longer financially sustainable,” he said.
The association highlighted the importance of the construction sector to the national economy, noting that it is among the country’s largest employment generators and contributes approximately 7.8 per cent to India’s GDP, while also generating substantial revenue through taxes and statutory levies.
The association has called for appropriate relief measures for the sector and has submitted representations to both the Government and the RERA Authority seeking extensions to project completion timelines under the force majeure provisions of RERA Act.
Expressing optimism about a favourable response from the authorities, CREDAI Ahmedabad noted that even though peace has been declared in the Middle East, it could take between nine and twelve months for global supply chains to stabilise fully and return to normal.
According to CREDAI Ahmedabad, prices of several key construction materials have increased by approximately 30 to 50% and continue to rise, significantly affecting project costs. Hence urge all stakeholders to adopt practicaland customer-centric approaches while recognising the long-term impact that current global conditions are likely to have on construction costs and project execution and added that keeping in mind the interests of the citizens emphasizing on Citizen-oriented planning and gradual price increases so that property buyers do not face a burden at a once, has requested each developer to increase the price by 5 to 10 percent according to the stage of their project at this stage.
Furthermore, even if the war ends, it will take at least 9 to 12 months for the supply chain to become regular, hence the appeal to take customer-oriented decisions.
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