According to an analysis by EY, rising crude oil prices linked to tensions in West Asia are likely to increase construction costs and create supply chain pressures for India's real estate sector. Currently, while the sector remains stable, developers are beginning to experience cost pressures on essential construction materials such as steel, PVC, and glass. The report indicates that the overall stability is due to most construction materials being produced locally. However, rising crude prices are expected to adversely impact production costs in various industries, including cement and steel, which are crucial for real estate development.

The analysis also highlights that companies in the Engineering, Procurement, and Construction (EPC) segment, particularly those with operations in the Middle East, may face operational disruptions and increased project costs. Furthermore, inflationary pressures could hinder the housing market by delaying interest rate cuts or potentially increasing interest rates, thereby affecting home loan affordability. Despite these challenges, the report suggests that geopolitical shifts could create opportunities in the data center segment, with major cloud companies considering relocating workloads to India, potentially accelerating the development of digital infrastructure.