Bharat Vs Pakistan: When Conflict meets Concrete 

As geopolitical tensions rise, experts are turning their attention to an often-overlooked casualty of war—real estate. While the visible destruction of infrastructure in conflict zones makes headlines, the broader economic ripples have a deep and immediate impact on real estate markets across the board.

Construction slowdowns, a decline in homebuyer sentiment, stalled retail expansion, and tourism setbacks are among the common outcomes of military conflicts. According to insights shared by Dr. Prashant Thakur, Regional Director and Head of Research at ANAROCK Group, these effects are not just theoretical—they are historically documented in India’s own experience during the 1971 Indo-Pak war and the 1999 Kargil conflict.

1971 War: Real Estate Comes to a Halt

The Indo-Pak conflict in December 1971 had a far-reaching economic impact. India’s GDP plunged from 5.4% in FY1970 to just 1% by FY1972, while inflation soared past 11%. With construction activity confined mostly to military infrastructure, the housing sector in Mumbai (then Bombay) suffered a 12% decline in project approvals. Property registrations dropped by nearly 10%, exacerbated by government controls on cement and steel.

Despite the economic strain, rent control laws kept rental prices relatively stable. In the commercial segment, major business hubs like Mumbai’s Fort and Delhi’s Connaught Place reported increased vacancies, although rents remained steady due to limited supply and regulatory rigidity.

Retail also took a hit. Largely unorganised at the time, key markets in Delhi and Kolkata experienced sharp drops in footfall. Court records from the period show an 18% rise in shop rent disputes in Mumbai. Meanwhile, the hospitality sector recorded a decline in Foreign Tourist Arrivals—from 2.02 million in 1970 to 1.96 million in 1971—and hotel occupancy in Delhi slipped below 45%.

1999 Kargil War: A Short-Term Shock

Although shorter in duration, the Kargil conflict of 1999 caused noticeable disruptions across the real estate spectrum. Coming in the wake of the Asian financial crisis, the war triggered a 3–8% decline in residential rental values in prime areas of Delhi and Mumbai. The commercial office segment added 4.8 million sq. ft. in supply that year, but central business districts such as Connaught Place saw vacancy rates rise to 15%.

Retail, still in its early stages of modernisation, faced delays in store launches as India’s first malls—Mumbai’s Crossroads and Delhi’s Ansal Plaza—neared completion. In hospitality, the North Indian market experienced 20–30% booking cancellations. However, tourism overall grew by 5.3%, thanks to a weaker rupee and targeted government promotion. Interestingly, Kargil emerged as a tourist hotspot post-conflict, doubling its footfall by 2003.

Outlook for 2024 and Beyond

If current military tensions escalate, analysts predict a short-term dip in residential demand, especially in Delhi-NCR and northern states. MNCs may postpone commercial leasing plans, and hospitality in sensitive areas could face booking cancellations. However, India’s real estate fundamentals are stronger than in past decades. With well-capitalised developers and conservative lending frameworks, the sector is better equipped to withstand shocks.

Prices are likely to remain stable unless hostilities persist beyond a fiscal year. In such a case, rising construction costs may trigger a delayed price increase rather than a market crash.

A Market That Bounces Back

History shows that while war can disrupt real estate temporarily, it does not derail long-term growth. As Dr. Prashant Thakur of ANAROCK observes, “India’s real estate market has consistently demonstrated resilience in the face of conflict. Wars may pause momentum, but they do not weaken the core of the sector.”

From Navi Mumbai’s planning during the 1971 war to mall launches amid the Kargil conflict, India’s real estate story is one of adaptability and recovery—even when conflict meets concrete.