GST Cut on Cement and Building Materials Expected to Ease Home Prices and Boost Housing Demand

The recent decision by the GST Council to reduce tax rates on key construction materials is being hailed as a turning point for India’s real estate and infrastructure sectors. The GST on cement has been reduced from 28 percent to 18 percent, while materials such as marble, granite, and sand-lime bricks have been lowered from 12 percent to 5 percent, effective September 22.

Industry experts believe this move will significantly reduce construction costs, as building materials account for nearly one-third of overall project expenses. Developers expect project costs to decline by 3–5 percent, which could make housing more affordable for buyers. In some cases, home prices may see a 1–1.5 percent reduction, improving demand across both affordable and mid-segment housing.

Real estate leaders have welcomed the announcement, noting that it will help revive demand in the affordable housing category, which has seen declining sales over the past few years. Industry bodies have also emphasized that lower material costs will improve cash flows for developers, encourage faster project launches, and support government-led initiatives to provide housing for all.

Apart from real estate, the reform is also expected to support infrastructure projects, where cement and other materials contribute a large share of overall expenditure. By lowering the cost of these inputs, the government aims to strengthen India’s construction ecosystem and accelerate economic growth.

However, some experts caution that the full benefit of these reductions may only be visible in the coming quarters, as current contracts and supply arrangements are phased out. The extent of savings passed on to end consumers will also depend on how developers and vendors manage input tax credits.

Overall, the GST rate cut on cement and construction materials is seen as a timely and growth-oriented decision that will make housing more accessible, strengthen infrastructure development, and provide a much-needed push to the country’s real estate market.