How Geopolitical Tensions Between US and Iran Impact Housing Prices in Mumbai and NCR

The ongoing Iran-Israel conflict is having a ripple effect on the Indian real estate sector, particularly in high-rise and luxury housing segments. The primary reason for this impact is the significant spike in steel prices. According to ANAROCK estimates, steel prices have surged by nearly 20% to around ₹72,000 per ton, primarily due to supply chain disruptions and war-related logistics issues. This increase is already translating into higher construction costs across major cities like Mumbai, Delhi-NCR, and Bengaluru.

In Mumbai, India's largest high-rise market, the increase in steel prices is adding nearly ₹50 per square foot to construction costs. This is especially true for high-rise buildings where steel constitutes a major portion of construction material. Industry experts expect similar cost pressures in other key markets such as Delhi-NCR and Bengaluru. The current spike is mainly due to supply chain disruptions and rising freight costs caused by geopolitical tensions.

Prashant Thakur, Executive Director & Head - Research and Advisory at ANAROCK Group, said the Strait of Hormuz blockade since early March 2026 has severely impacted the sector. He warned that rising material costs and supply delays could potentially delay or even stall projects. The cost of hot rolled coil currently ranges between ₹51,000-56,000 per ton and could rise to ₹62,000 by June if conditions don't improve.

The cost pressures are also being felt in other high-rise-heavy markets like Delhi-NCR and Bengaluru. In Delhi-NCR, where luxury and high-rise developments dominate key corridors like Gurugram and Noida, construction costs are likely to rise by ₹40-60 per square foot. Projects with higher steel intensity could see sharper increases. Meanwhile, in Bengaluru, the impact is expected to be a bit lower but still significant, with costs rising by ₹30-50 per square foot.

Despite the rising costs, industry bodies remain optimistic about the Indian real estate sector's stability. Shekhar Patel, President of CREDAI, said that just temporary supply chain disruptions are being observed due to global energy volatility. He added that certain clusters like Morbi in Gujarat are facing short-term challenges owing to fuel supply constraints and elevated logistics pressures but these are transitional in nature.