Get ready for pricier homes and buildings in India. A new report from JLL predicts a nationwide increase of 6% in real estate construction costs for the 2024 fiscal year.
While the rise will affect all sectors, some cities will feel the pinch more than others. Mumbai retains its crown as the most expensive city to build in, due to factors like higher prices for essential materials such as cement and steel. Chennai, on the other hand, offers a more cost-effective option for developers.
The JLL report points to rising labor costs as a key driver of the overall increase. Wages for construction workers have been steadily climbing for the past three years, adding roughly 2% to project expenses. This growth, however, is primarily in the unskilled labor category, highlighting a continuing shortage of skilled workers in the industry.
India’s construction sector is booming, with the workforce expanding to an estimated 71 million in FY 2023, driven by urbanization and growing infrastructure needs. However, the JLL report warns that a lack of vocational training institutes is hindering the development of skilled labor, potentially posing a challenge for the future of the industry.
