Ahmedabad: The ongoing conflict in West Asia has begun to cast a shadow over Gujarat’s real estate sector, with redevelopment activity slowing amid rising construction costs and labour shortages.Industry players say several redevelopment negotiations have been put on hold as developers reassess financial viability in a rapidly changing cost environment. A sharp increase in raw material prices following the West Asia conflict has rendered many earlier offers unworkable, while labour constraints have further strained project execution timelines.The war in West Asia has impacted the availability of crude-linked construction materials, disrupting project execution and strained financial planning across the sector. “Cement, steel, PVC pipes, waterproofing materials, aluminium sections, aluminium pipes etc have seen steep price rise over the past two months. There is no long term price surety,” said CREDAI Ahmedabad secretary Ankur Desai. According to Jitendra Shah, president of the Urban Redevelopment Housing Society Welfare Association, redevelopment momentum has weakened considerably this year. “About 30 memorandums of understanding have been signed so far in 2026, and discussions across nearly 100 housing societies have slowed. Builders are taking longer to decide as older offers are no longer viable,” he said.Shah noted that construction costs have surged by nearly 20% since the conflict began, prompting developers to pause rather than abandon projects outright in anticipation of improved demand. However, some long-pending negotiations have already been withdrawn, particularly those ongoing for over three years.In Ahmedabad, 150 redevelopment projects have been completed so far, with 40-50 delivered in the past year alone. Yet, these developments are currently burdened with nearly 25% unsold inventory, adding to market caution.Developers say the existing unsold stock is intensifying competition, making it difficult to absorb higher input costs while offering attractive terms to housing societies. Kartik Soni, a city-based developer, said the cost pressures are becoming increasingly significant. “There is tough competition, and while redevelopment had picked up earlier, many projects still have unsold inventory. If construction material prices remain elevated, new launches will become more expensive,” he said.He added that rising prices of new projects could shift buyer preference towards existing inventory available at earlier rates, potentially helping clear unsold stock.
