Greenfield Construction Costs Marginally Increase by 2-4% in CY 2024
CBRE South Asia Pvt. Ltd. has released its annual report, "India Construction Cost Trends 2024-25: Navigating Costs in a Transforming Landscape", highlighting a modest 2-4% rise in greenfield construction costs in 2024 compared to 2023. This is a sharp decline from the 6-8% hikes seen in 2021-22, driven by easing supply chain disruptions and stabilizing inflation.
The report notes a dip in prices of key materials such as cement (6-8%), steel (3-5%), and aluminium (0-2%) over the past year, while paint prices remained steady. However, wood and stone saw price increases of 3-6% and 0-2%, respectively.
Despite material cost moderation, a 5% rise in labour costs due to ongoing shortages in skilled and unskilled workers has offset these benefits, keeping overall construction costs high. The report also analyzes trends across major real estate segments and factors shaping the current cost landscape.
In terms of cities, Mumbai witnessed the highest Y-o-Y increase of ~4-6% in fit-out costs in 2024, while Delhi-NCR, Bengaluru, Chennai, Hyderabad, and Pune recorded a ~3-4% growth.
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, “India’s construction sector remains a key pillar of economic growth, poised to become the world’s third-largest market by 2025. From impressive skylines in cities to extensive infrastructure projects that connect remote areas of the country, the construction sector serves as a vital foundation for India's broader economic objectives. Stabilising construction costs, rapid urban expansion, and sustained real estate demand foster resilience and new opportunities. While workforce shortages present challenges, the sector continues to attract strong investments, driven by sustainability, technology, and high-quality developments.”
Gurjot Bhatia, Managing Director & Head, Project Management Advisory, Asia-Pacific, CBRE, said, “India’s construction industry is witnessing progression, but with this growth comes the challenge of managing costs effectively. As new projects emerge across residential, commercial, and industrial sectors, fluctuations in greenfield construction costs play a critical role in project feasibility and financial planning. Stakeholders must navigate the ripple effects of macroeconomic trends on material costs, evolving fit-out costs, and the growing emphasis on sustainability and technology integration. Understanding cost variations across asset classes—whether in residential buildings, office spaces, warehouses, or retail centres—is crucial for long-term market stability. The continued emphasis on quality, sustainability and digital adoption is expected to shape the future of real estate development in India.”
