Don't want to miss the best from Business Standard?
Wednesday, December 03, 2025 | 04:57 PM ISTहिंदी में पढें
Real estate developers stuck between construction cost wall and soft market
Price rise mainly due to jump in cost of cement, steel, and skilled labour
 "Construction, infrastructure, Cement prices, steel prices")
premium
The outlook for construction costs remains uncertain amid ongoing geopolitical tensions and global economic events
Rising construction costs are set to pressure real estate developers’ profitability, as passing on the increasing cost to homebuyers has become difficult due to already elevated home prices and a moderation in housing demand.
In the cost structure of an average real estate project, construction accounts for around 40 per cent, land costs for 20–30 per cent, and the earnings before interest, tax, depreciation, and amortisation margin hovers around 30 per cent, according to Vijay Agrawal, managing director (MD) — investment banking, Equirus.
Agrawal believes that valuations of real estate companies have come down because of the slowdown in sales
