Why your south Mumbai apartment can get pricier: Builders are likely to hike price by 5%
High end apartment costs can rise as construction inputs gets costlier
Luxury housing is among the most affected segments
Future outlook 2026
The Gulf region, which consists of countries like the United Arab Emirates, Qatar, Kuwait, Saudi Arabia, Iran, Iraq, Bahrain, Oman and others, is facing war-like conditions because of ongoing escalations by Iran, Israel, US and various foreign powers. While India is not directly involved in this conflict, the effects can still be felt indirectly.According to an analysis by Anarcock, a real estate consultancy, , a significant number of high-end residential properties in south Mumbai, BKC, Worli, and Lower Parel are set to see the biggest price hikes due to the construction cost shocks caused by the war.Anarock’s research indicates that the Gulf crisis has led to soaring oil prices, which in turn is causing a rise in prices across the economy. Dr. Prashant Thakur, Executive Director & Head - Research & Advisory, ANAROCK Group, says: “Most developers of luxury projects expect to have to hike their prices by over 5%.”Thakur points out that approximately 15 to 22% of high-end luxury apartments in cities like Mumbai and Delhi are bought by NRIs from the Gulf , according to industry estimates. According to leading luxury developers, NRIs contribute 30% and above of their total sales value in premium and luxury projects.According to Thakur, increased costs , will have the most significant impact on India’s high-end housing hotspots.Mumbai Metropolitan Region (MMR), India’s skyscraper capital with 300+ towers, and over 5,500 high-rises, is also the leader in India’s ultra-luxury housing segment (homes priced above Rs 40 crore).In 2024, India saw 59 ultra-luxury homes priced above Rs 40 crore sell for a combined value of about Rs 4,754 crore, with Mumbai alone accounting for roughly 88% of both units and value in this bracket. Micro-markets such as Worli have emerged as epicentres. Worli by itself has logged over Rs 5,500 crore of Rs 40 crore-plus apartment sales in just two years and now accounts for about 40% of India’s ultra-luxury apartment transactions.In volume terms, this speaks for the bulk of such high-end residential units sold across the country. South Mumbai, BKC, Worli, and Lower Parel lead the city’s luxury vertical boom and are where almost all such projects are heavily concentrated in Mumbai.Thakur says: “These markets are going to experience the strongest blow of the Hormuz-induced construction price shocks. It will probably not impact ultra-luxury sales, though.”According to Thakur, steel prices have surged almost 20% to Rs 72,000/tonne, from Rs 62,000 earlier.Thakur says: “At a very rough estimate, this adds approx. Rs 50/sq. ft. to the cost of building high-rises in Mumbai, which currently has well over 10,000 luxury units under construction.”Thakur says that the cost of hot rolled coil now hovers at Rs 51,000-56,000 and may hit Rs 62,000 by June if the situation does not change for the better.Skyscrapers use ribbed steel rods set in concrete to enhance their tensile strength, and this extra expense directly impacts both the cost and the speed of their construction. The price of diesel for construction cranes and mixers is closely linked to the USD 100+ price tag of Brent crude.Thakur says: “This price shock will reflect significantly on construction sites in Mumbai, Delhi-NCR, Hyderabad, and other high-rise-centric cities around the country.”Aluminium plants in Bahrain and Qatar are now either partially or fully closed and the price of aluminium, another important input in construction, now hovers at around Rs 3.5 lakh/tonne. Delhi’s facade-heavy office parks, where aluminium-glass curtain walls dominate the external envelope, will witness steep cost overruns.Thakur says that the price of bitumen, required to construct critical infrastructure projects like the Mumbai-Nashik expressways and Delhi’s peripheral roads, had already risen to Rs 48,000-51,000/tonne.Luxury housing is among the most affected segments. Premium plotted developments can face similar cost additions on imported fittings. Thakur says that the Italian Statuario and Calacatta marble used in Mumbai’s sea-facing penthouses and other ultra-luxury units now comes with an addition Rs 50-150/sq ft premium due to the rerouting fees, resulting in Rs 6000/sq. ft. total all-in cost for this marble once it is installed.As it is, construction costs in cities Mumbai and Delhi have risen by as much as 39% over the past four years and now average at around Rs 2,780/sq. ft. for mid-to-luxury skyscrapers.Thakur says: “The cost of construction labour, which is commonly 25-35% of total project cost incurred by the developer, has risen by anywhere between 25% and 40% in the last 4-5 years because of sharpening skilled worker shortages and overall wage inflation.”Even if the Gulf war ends tomorrow, the Strait of Hormuz opens and shipping resumes normally, the additional cost for buying residential apartments is not likely to be reduced immediately.Thakur says that he expects a 2–8-week period for tanker pileups to clear as carriers test the safety of the route. Freight surcharges and higher shipping insurance will remain high in locked contracts. War‑risk surcharges and rerouting have cumulatively added anywhere between Rs 2–3.5 lakh per container, especially for cargoes linked to Gulf routes.Thakur says: “This severely impacts imported finishes, metals, and high‑value components commonly used in South Mumbai luxury towers. The port backlogs will delay the arrival of steel and aluminium.”According to Thakur, a full reset will take anywhere between 1-3 months and certainly, a reboot of global shipping will not help developers to achieve their usual monsoon timelines. Much of the damage to 2026 is, so to say, cast in steel and concrete.