Construction Materials See 4.08% Price Hike: Impact on Real Estate and Projects

The Wholesale Price Index (WPI) for July–August 2025/26 shows that construction materials in Nepal rose by 4.08% year-on-year, after rebounding from last year’s decline (-4.21%). The category index climbed to 138.12, compared to 132.71 a year earlier, signaling renewed cost pressures across the construction and real estate sectors.

The rise was largely driven by non-metallic mineral products (+16.73%) such as cement, tiles, and bricks, which recovered strongly after two years of decline. Additionally, basic metals (+9.54%) provided another sharp boost, reflecting rising global steel and iron prices, as well as growing domestic demand for construction and infrastructure projects. While wood and paper products saw more modest increases (+1–3%), they too contributed to the upward trend.

For the real estate market, higher wholesale costs for building materials are expected to translate into rising property prices, especially in urban centers where housing demand remains high. Contractors and developers will face increasing input costs, which could either slow down new projects or pass expenses onto buyers. For infrastructure projects, rising construction costs may pressure government budgets, leading to potential delays or cost overruns in planned developments.

This trend underscores how construction inflation is re-emerging as a key challenge for both private real estate and public infrastructure in Nepal. With global metal prices volatile and domestic demand rising, the sector may continue to see elevated cost pressures in the months ahead.