While the cost of steel, cement, block and diesel increases on average by 10 to 30 percent, the cost of the house can increase by 10 percent as the cost of the project increases.
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Ahmedabad 17 days ago
The launch of new projects will be delayed. Ongoing projects will be delayed for 3 to 6 months. The promoters-builders granted a discount of 5 to 10% of Kovid.
The real estate sector has grown rapidly since August, but the situation has changed in the past two months. The performance of the sector slowed due to the rise in commodity prices. The real estate industry has been stifled by an artificial bullish cartel formed by cement and steel companies. Cement and steel prices have risen on average 20 to 35 percent over the past year. Developers and builders were offering discounts of 3 to 10 percent for the real estate sector in Gujarat, but it is no longer possible to offer discounts due to the high cost of raw materials. Not only that, developers and builders can no longer bear the extra burden which can place the burden on customers, said CREDAI Chairman Jakshay Shah. They added that developers had been working with low margins in recent years but could no longer bear the burden of losses. We will also introduce to Rera that the project timeline should be extended and the cost should be increased.
75% more share in construction Steel-cement up to 35% Cement, steel-iron price increase 1 lakh crore Gujarat real estate market 3 lakh more houses sold annually in Gujarat
The increase in the cost of the project will slow down operations
Due to the high cost of raw materials, the project deadline will be extended from 6 to 12 months. Projects started before Corona have been extended for six months, while operations have now slowed due to high commodity prices. Margins for developers and builders have been reduced. – Nitish Agarwal, MD-Nexrice Group
Over Rs 200 per square foot can be increased
Developers are at a disadvantage due to the constant rise in the prices of raw materials. If the commodity boom lasts longer than two to three months, the burden on consumers will increase in the long run. An average increase of over 200 per square foot is expected. I cannot bear the burden for long. – Yash Brahmbhatt, founder of the Shilpa group.
Investor sentiment turns positive
Investor sentiment in the sector is moving in a positive direction. The government has taken various incentives to stimulate the economy and bring business activity to pre-covid levels, which is having a positive impact. The coming new year should be resilient for the industry. – Shishir Baijal, Chairman and CEO, Knight Frank India.
In 2021, house prices could increase by 10 to 15%
The sector has stagnated due to the Corona outbreak, but the way commodity prices are currently rising, on the other hand, demand is massive and the launch of new projects is slow as house prices could rise in average 10-15% next year. The total cost of the project has borne 15% over the past six months. – Saket Agarwal, director – Swati Procon.