Real Estate News: The higher input costs, including labour charges, may raise the overall construction cost of real estate projects. According to a report by JLL India -- 'Construction Cost Guide, India - 2026', the costs may surge in the range of 3 to 5 per cent in 2026.
The report said that cement, steel and diesel prices showed a mild decrease of 1-2 per cent, 3-4 per cent and 5-6 per cent, while aluminium and copper costs experienced more significant increases of 8-9 per cent and 9-10 per cent respectively, driven by global demand pressures and supply chain dynamics.
Labour costs increased 5-6 per cent across all categories, driven by skilled labour shortages and infrastructure demand, said that real estate consultant in its report.
JLL said that the GST rate cut by the government offered a critical 10 per cent tax relief on cement. This, in return, allowed savings of 2-3 per cent for real estate developers. Also, property prices remained under check, dropping in the range of 1 to 1.5 per cent.
With the new labour code taking effect from November 2025, JLL said that the labour costs will go up by 5-12 per cent across all skill categories.
"Construction costs in 2026 are expected to rise 3-5 per cent, driven by regulatory changes, skilled labour scarcity, and stricter environmental standards. Digital technologies help offset these pressures by improving efficiency and delivering greater project value," Ashok VS, Head of Cost Management, JLL PDS, India, said.
Recently, CREDAI and NAREDCO said that the real estate companies are facing a short supply of some building materials, and noted that construction costs could rise if tensions continue in the Middle East for a longer period.
Earlier in 2025, the material costs of real estate projects presented a mixed picture.
