property prices: Property developers want govt to step in as input costs pinch

Property companies want the government to intervene and stop the continued increase in input costs in order to achieve the broader collective goal of making homes affordable for a large population.

The Russo-Ukraine war has more than doubled the prices of some raw materials, making it impossible for developers to sell homes at previously contracted rates.

Developers have increased residential property prices by 6-8% in the past few weeks in several cities across the country, including Mumbai. Besides raising prices, developers are also looking at slowing down the pace of construction to deal with input cost pressures.

Over 40% of the 1,850 real estate developers surveyed by the Confederation of Real Estate Developers Association of India (CREDAI) expressed their concerns over business continuity in the backdrop of a steep rise in raw material prices.

Developers alleged cartelization in the steel and cement industries, seeking state intervention to ensure fixed prices for raw materials. The cost of cement has risen by more than ₹100 per bag in the last one year, while steel prices have risen 2.3 times to ₹90,000 from ₹39,000 per metric tonne.

Additionally, they also want the government to provide GST input credit on manufacturing raw materials.

Harshvardhan Patodia, President, CREDAI said, “For the past one year, developers have been able to absorb the increase in cost of construction to accelerate the growth of the industry.” “However, with lower margins, it will eventually have to be passed on to buyers, which may not bode well for the pace of industry growth.”

CREDAI has spoken to the concerned ministries seeking their intervention to avoid any delay in the delivery of projects to home buyers, help kick-start stalled projects, and save many jobs as the industry faces 251 ancillary industries. supports.

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