Greenfield construction costs in India saw a marginal increase of 2-4% in 2024, according to CBRE South Asia Pvt. Ltd.'s latest report, India Construction Cost Trends 2024-25. This marks a slowdown from the 6-8% increase recorded in 2021-22, reflecting improved supply chains and stabilizing inflation.
The report highlighted fluctuations in material costs, with cement, steel, and aluminium prices dropping by 6-8%, 3-5%, and 0-2% respectively, while paint costs remained stable. In contrast, wood and stone prices rose by 3-6% and 0-2% due to selective demand pressures.
Despite material cost moderation, labour expenses increased by 5%, driven by persistent workforce shortages. This effectively balanced out material savings, keeping overall construction costs elevated.
Looking ahead to 2025, construction costs are expected to rise in line with inflation, with labour costs projected to increase by 6-8%, steel and cement by 2-4%, and fuel by 2-4%.
Among cities, Mumbai recorded the highest fit-out cost increase at 4-6%, while Delhi-NCR, Bengaluru, Chennai, Hyderabad, and Pune saw a 3-4% rise.
Anshuman Magazine, Chairman & CEO - CBRE India, South-East Asia, Middle East & Africa, emphasized the sector's resilience, stating that India is on track to become the world's third-largest construction market by 2025. He highlighted that stabilizing costs, urban expansion, and real estate demand are driving sectoral growth despite labour shortages.
Gurjot Bhatia, Managing Director & Head, Project Management Advisory, Asia-Pacific, CBRE, noted that cost fluctuations impact project feasibility and financial planning, urging stakeholders to adapt to macroeconomic trends, sustainability demands, and digital advancements for long-term market stability.
