Demand for housing, office, retail space may dip slightly if India-Pakistan conflict widens: Anarock

Time of India

09-05-2025

Anarock anticipates a temporary 5-10% dip in North Indian housing sales if the India-Pakistan conflict escalates, potentially impacting office and retail spaces. Construction delays and dampened confidence may lead to purchase postponements, though long-term demand is expected to recover within a year. The hospitality sector in affected regions could see occupancy drops, but domestic leisure travel should remain robust.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Housing sales in north India may be impacted for a short term and fall by a modest 5-10 per cent if the ongoing conflict between India and Pakistan broadens, real estate consultant Anarock said on Friday. The demand for office and retail spaces might also have some impact for short term, the consultant said, but ruled out any "outright plunge"."If the current conflict broadens, we should be prepared for certain ramifications," Anarock Group Regional Director & Head, Research, Prashant Thakur said in a statement."Wars also stall construction and dampen end-user and investor confidence. Aspiring homebuyers put decisions on hold. Retailers put a brake on their expansion plans, and tourists postpone their travel plans. Real estate markets adapt, pause, and then bounce back," he said.In the housing segment, he said sales in Delhi-NCR and other parts of north India may witness a short-term dip of 5-10 per cent. Luxury housing buyers tend to delay purchases in periods of uncertainty. Demand for mid-income housing will be the first to recover once normalcy is restored. However, prices of cement and steel would remain elevated over the medium term unless the government intervenes.On office demand, the consultant said MNCs might put their entry/expansion plans into India on hold temporarily if the conflict persists or widens."This would obviously impact absorption numbers, but long-term demand -- most notably from the GCC, BFSI and IT sectors -- will return and strengthen within 12 months or less," he said.Anarock said there could be a drop in footfall in shopping malls."Nevertheless, India's consumption will overcome these odds quickly and Indian retailers have perfected the art of nimbleness during Covid-19 -- expect highly imaginative promotions to draw the crowds back in," he said.In the hospitality segment, Anarock said Delhi, Kashmir, and other impacted regions are going to see a flurry of cancellations if the conflict persists or widens."We may see hotel occupancies drop by anywhere between 10-15 per cent in these areas. However, domestic leisure travel -- which accounts for almost 90 per cent of room-nights -- will not flounder and we can definitely expect a massive surge of 'victory tourism' such as was seen in Kargil once hostilities cease," the consultant said.Thakur said there could be some short-term sluggishness in the market, but there is no question of an outright plunge."Much has changed since the bombs last flew at scale -- the country's economy has strengthened considerably, its real estate sector has become more disciplined and regulated, and homebuyers showed their strongest side during what was expected to be the death-knell of the housing market -- Covid-19," he added.Anarock is one of the leading real estate consultants in the country. Its revenue grew 36 per cent to Rs 566 crore in the 2023-24 fiscal year.