From Conflict to Confidence: Why Indian Real Estate Doesn’t Crumble Under War Pressure

Industry experts have indicated that while geopolitical tensions between India and Pakistan may cause short-term hesitation among property buyers and investors, India’s real estate market remains fundamentally strong and unlikely to face a deep slump.

Short-Term Sentiment May Dip, But Long-Term Stability Expected

According to real estate analysts, while buyers—especially in North India—could momentarily pause their decision-making due to the uncertain environment, the sector is not expected to witness a collapse. Past experiences during the 1971 and 1999 wars support this resilience narrative.

Aditya Kushwaha, CEO of Axis Ecorp, was reported saying that real estate, being a long-term investment, continues to be driven by solid fundamentals. He believes that while clarity is awaited in the current standoff, activity will resume in due course as most stakeholders are simply observing the situation for now.

How Past Wars Shaped Real Estate

1971 War: Supply Controls and Housing Project Delays

During the 1971 war, the government’s control over materials like steel and cement led to significant slowdowns in housing project approvals. Mumbai reportedly witnessed a 12% dip in approvals and around a 10% fall in property registrations. Commercial real estate development also halted, though rentals remained relatively stable due to limited supply.

Retail businesses saw dwindling footfalls, particularly in Old Delhi and Kolkata. The unorganised nature of the retail sector at the time contributed to this impact. An 18% increase in shop rent disputes was recorded in Mumbai during this period, pointing to rising tenant stress.

Hospitality Sector Also Suffered

Foreign tourist arrivals dropped from 2.02 million in 1970 to 1.96 million in 1971. Delhi’s hotel occupancy plunged below 45%, and major players like Indian Hotels Company experienced a double-digit revenue decline, especially in conflict-prone zones like Srinagar.

1999 Kargil War: Temporary Market Jitters, Quick Recovery

Although the Kargil War generated panic, the liberalised Indian economy displayed quicker recovery. Rental values in upscale areas of Delhi and Mumbai fell by 3–8%, but bounced back before year-end. Interestingly, luxury apartments in Mumbai’s Cuffe Parade continued to command high rates of Rs 20,000–23,200 per sq. ft.

Despite increased vacancy rates of 11–15% in Central Business Districts like Connaught Place, international companies largely deferred—rather than cancelled—leases. Bengaluru’s emerging IT hubs like Koramangala continued to perform steadily with rents between Rs 35–65 per sq. ft. per month.

Retail expansion paused temporarily, and hotel bookings—especially in Delhi and Kashmir—took a hit with cancellations rising 20–30%. However, post-war recovery was swift, with Kargil emerging as a tourism hotspot, doubling its annual footfall by 2003.

The Current Scenario: Watchful Optimism

Prashant Thakur of ANAROCK explained that although homebuyer sentiment in Delhi-NCR and Northern India might dip by 5–10% in the short term, there’s no expectation of a market crash. He noted that luxury buyers typically delay decisions during turbulent times but added that India’s strengthened economy and more regulated real estate landscape provide strong cushioning against prolonged downturns.

Corporate occupiers, especially multinational firms, may reconsider immediate expansion plans due to perceived instability—blackouts, airport shutdowns, and threats of missile strikes being among the concerns. Nonetheless, no major exodus or mass lease cancellations are expected.

Conclusion: India's Real Estate Stays Strong Amid Storms

From war-induced construction halts in 1971 to swift rebounds in 1999, India’s real estate sector has weathered conflict before and is poised to do so again. With a more organised and regulated market, developers and analysts remain cautiously optimistic, emphasising that temporary slowdowns don’t translate to long-term damage.

Disclaimer: This news article is based on inputs from industry experts and past data. It is intended for informational purposes only and should not be considered as financial or investment advice.