Labour codes: Real estate expects up to 10% spike in baseline labour cost

Developers expect short-term cost and timeline pressures, but say unified labour laws will bring predictability, better compliance and steadier workforce availability

With four labour Codes having been made effective, real estate is bracing itself for an increase in baseline labour costs of 5-10 per cent over the next one year, with labour making up close to one-fourth of project costs.  

According to industry executives, labour accounts for 25-30 per cent of project costs, and hence a structural change affects developers’ projections.  

“We are estimating a baseline increase of 5-10 per cent over 12 to 18 months,” said Sujay Kalele, founder, Mumbai-based MD TRU Realty. 

Suruchi Kumar, partner at law firm Shardul Amarchand Mangaldas,