India’s real estate sector may face rising construction costs in the coming year, with estimates suggesting an increase of 3% to 5% in 2026. According to a recent JLL report, the rise is driven by escalating labor costs and fluctuations in raw material prices.
The implementation of new labor laws in late 2025, which mandate improved wages, social security benefits, and healthcare coverage, has significantly increased labor expenses. At the same time, while prices of certain materials such as cement and steel have seen marginal declines, others like aluminum and copper have witnessed substantial increases.
Additionally, a shortage of skilled labor and increased demand for infrastructure projects are contributing to the cost pressures. These factors are expected to impact project profitability and could potentially lead to higher property prices in the near future.