Whalesbook
Convention Moves Home Amid Global Uncertainty
CREDAI has made a major change to its main annual convention, NATCON 2026, moving the event from Amsterdam to an Indian city not yet named. This decision directly follows Prime Minister Narendra Modi's recent call for wise spending, less unnecessary foreign travel, and more support for the domestic economy. It highlights how global instability and its economic effects are increasingly impacting Indian industry. The move shows CREDAI's commitment to national interests and boosting the domestic economy during a time of greater global uncertainty.
Real Estate Sector Faces Rising Costs
This move comes as India's real estate sector faces significant challenges. Tensions in West Asia have pushed crude oil prices over $100 per barrel, affecting India's import costs and foreign currency reserves. This jump in energy prices means higher costs throughout the construction process. Fuel and shipping expenses have risen, impacting how materials are transported. Prices for key materials like steel and cement have stabilized, but indirect costs from oil-based products such as PVC, pipes, and cables have jumped. Electrical components could see prices rise by up to 25%. Overall, construction costs are expected to increase by 3-5% in 2026 due to these higher input prices.
A persistent labor shortage adds to these rising costs. Labor is a large part of construction budgets. New labor codes, implemented in late 2025, have further increased costs by an estimated 5-12%. This is due to better social security and wage rules. The rise in material and labor costs is creating ongoing problems. Property prices are staying high or expected to increase, even though buyer interest is weakening. Sentiment in the sector has turned pessimistic, with the Knight Frank-Naredco Real Estate Sentiment Index showing a Current Sentiment Score of 49 in Q1 2026.
Deeper Issues Behind the Convention Move
CREDAI hosting NATCON in India is presented as supporting national goals, but it could also hide deeper problems in the real estate sector. The need to cut foreign spending and focus on the home market might show that developers are finding it harder to justify foreign investments or expansion. This is due to tight domestic profits and difficulties in carrying out projects. The sharp fall in overall real estate sentiment indicates that people involved are worried about broader economic pressures. The sector faces a tough choice: higher costs for materials and labor mean prices must rise, which could deter buyers, especially in the mid-income and affordable housing markets where demand is usually strong. Moving the convention to India might be a practical step to focus on domestic business and save money, rather than seeking international exposure, especially when ongoing global conflicts and fluctuating energy prices threaten project completion and profitability.
Sector Outlook: Strength Through Domestic Focus
Despite these challenges, the Indian real estate sector is fundamentally strong. Developers have less debt compared to past cycles, and demand is supported by factors like people moving to cities and rising incomes. The government's overall plan aims to improve economic stability by attracting foreign investment, reducing imports, and using smart policies. By holding NATCON 2026 in India, CREDAI supports this national aim. It could also encourage discussions within the country on how to solve high costs and labor shortages. The sector is expected to move through current difficulties with steady, though slower, growth. Focusing on finding ways to save money and adjusting plans will be key to continued success.