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We've flagged this issue earlier and it just seems to be getting worse with time. Real estate developers are sweating it out big time as construction cost is making projects unviable at current prices.
And this time, they are urging the government to help stabilise raw material costs.
How Bad Is It?
In 2020, the cost of a tonne of steel was INR 43,000, today it costs nearly INR 70,000. A cement bag which was going for INR 230 last year has touched INR 400.Towing the line, the cost of bricks, sand, tiles and the kitchen sink have all seen over a 50% hike in rates.
While discussing the impact on individual buyers, CREDAI members of Andhra Pradesh said that an additional cost burden of INR 500 per sq. ft. had impacted the sale of apartments in the Fort City.
Home prices, however, cannot go up right now as that might collapse the deck of cards - that is the home buyer sentiment - which has just breached some new levels after many years.
You Can Feel The Effects
Across the country, home prices in certain localities with high demand have gone up between 5% - 10% silently.
Housing is already unaffordable in many parts of the country and a further increase in price (as a direct result of increasing costs), is shooing away home buyers just when things for the sector are looking up.
Many CREDAI members were also vocal about the fact that builders would not dare to take up new ventures if the prices of raw materials did not stabilise.