News: Hormuz Blockade Lifts Building Costs, Says Anarock-19-03-2026
The blockade of the Strait of Hormuz since early March is raising material costs, disrupting supply chains and increasing the risk of delayed or stalled projects, according to an analysis by Anarock. It expects construction in high-rise markets such as Mumbai, Delhi-NCR and Hyderabad to be affected and most luxury developers to raise prices by over 5%.
The analysis said steel has surged by around 20% to Rs 72,000/tonne from Rs 62,000 earlier. At a very rough estimate, that adds approximately Rs 50/sq. ft. to the cost of building high-rises in Mumbai, which has well over 10,000 luxury units under construction. Hot-rolled coil is at Rs 51,000-56,000 and may reach Rs 62,000 by June if conditions do not improve. Diesel for cranes and mixers is tied to Brent crude at $100+.
With aluminium plants in Bahrain and Qatar partially or fully down, aluminium is around Rs 3.5 lakh/tonne, which will mean steep cost overruns for Delhi’s facade-heavy office parks that rely on aluminium-glass curtain walls. Bitumen, needed for projects such as the Mumbai-Nashik Expressway and Delhi’s peripheral roads, had already risen to Rs 48,000-51,000 per tonne, said Prashant Thakur, Executive Director & Head - Research & Advisory, ANAROCK Group.
Luxury housing is among the worst hit. Imported Italian Statuario and Calacatta marble, widely used in Mumbai’s sea-facing penthouses, now costs an extra Rs 50-150 per sq ft because of rerouting, taking the installed price to around Rs 6,000 per sq ft. Premium plotted developments face similar escalation on imported fittings and finishes.
These pressures come on top of earlier increases. Construction costs in Mumbai and Delhi have risen by as much as 39% over four years and average around Rs 2,780/sq. ft. for mid-to-luxury skyscrapers. Labour, commonly 25-35% of a developer’s project cost, has become 25-40% costlier over the last 4-5 years.
The analysis said housing sales were already tapering. Diplomacy has got some LPG tankers through the Strait, but bulk imports must travel an additional 6000-10000 nautical miles, marine fuel is about Rs 1 lakh/tonne, and there are ’war surcharges’ and sharply higher shipping insurance. Indian regulators are now cracking down on shipping profiteering, it said. War-risk surcharges and rerouting have together added Rs 2-3.5 lakh per container, especially on Gulf-linked cargo, hitting imports of finishes, metals and high-value components, while port backlogs will delay steel and aluminium.
The Mumbai Metropolitan Region (MMR), with 300+ towers and over 5,500 high-rises, leads the ultra-luxury segment of homes above Rs 40 crore. South Mumbai, BKC, Worli and Lower Parel, where most such projects are concentrated, will take the strongest blow from the price shock, though the analysis said ultra-luxury sales will probably not be affected.
High oil prices leave little hope of rate cuts soon, it noted, but luxury buyers can largely absorb price increases. One concern is Gulf NRIs, who make up roughly 15-22% of high-end sales in cities like Mumbai and Delhi according to industry estimates. Leading luxury developers say NRIs contribute 30% and above of their sales value in premium and luxury projects. These buyers now face disrupted and delayed flights to India for site visits and closing deals.
Even if the war ended tomorrow and shipping resumed, the added costs would not fall at once. The analysis expects a 2-8-week period for tanker pile-ups to clear, with freight surcharges and insurance staying high in locked contracts.
