Due to the steep hike in the price of construction materials, the cost has increased by 20% in the real estate sector to around Rs. 300/- per sq. ft, said Vijay Dargan, President of Confederation of Real Estate Developers’ Associations of India (CREDAI) Nagpur Metro while expressing his concerns about the adverse effect of this price increase today.
“The prices of raw materials are steadily inching upwards over the last couple of months and have hit the real estate industry. This has affected the developers who are struggling not to pass on the increase to the customers but now cannot hold the same for long; the hike in property prices is certain and inevitable,” Dargan added.
Prices of cement, sand, steel, iron and various other raw materials have increased which has affected the construction industry. With the rise in prices, it is expected that the prices of flats and houses may also increase.
Developers said that this has limited their capacity to come up with new offers and give any discount to their customers. Anyone undertaking a project now will have to spend additional money and because of this, apartment prices are likely to go up, expressed Sunil Duddalwar, former President.
The retail cement prices have increased by 40% to 50% from Rs. 250 in May 2021 to Rs. 370 per 50 kg bag in June and are expected to rise in July. Similarly, there is a steep rise in steel prices as well. The price of iron which was available in the range Rs. 35 to Rs. 40 per kg is now available at the price of Rs. 60 to Rs. 65 per kg.
Since January this year, there has been an increase of about 15% in the prices of pipes and insulation materials as a result there is an increase in prices of resin and polymers.
“Steel is a major raw material of the real estate sector. Although we are trying to absorb the hike in the cost as much as possible, the sharp increase in the prices of this key input may affect the final pricing of properties at some stage,” said Gaurav Agarwala Secretary CREDAI Nagpur Metro.
Other important construction materials like sand, stone aggregates, plywood materials, sanitary have also seen a massive hike in prices in the last one year, pushing up the overall construction cost.
CREDAI is worried that this increase in raw material is hitting the real estate sector and common people have to shell out more to own their dream home. “Altogether it was the best time to purchase a dream home before the prices go up,” said Prashant Sarode, former President.
Also present were Anil Nair, Santdas Chawla, Rajmohan Shahu, Chandreshaker Khune, Eklavya Wasekar, Abhishek Javery, Pratish Gujrathi, and Vijay Joshi at the press conference.