Credai said, the cost of construction has increased by 10-20 per cent due to the cost of cement and steel.
Real Estate Sector
Credai, the apex body of real estate developers, said that the increase in the prices of steel and cement may increase the price of the house in the coming times. CREDAI said, the cost of construction has increased by 10-20 per cent due to the cost of cement and steel. Due to this situation, housing prices are likely to rise in the medium to long term.
CREDAI Chairman Satish Magar said in a virtual press conference that due to the second wave of COVID-19 (COVID-19), there has been a sharp decline in the sale of houses since April. He, however, did not provide any data on the decline in expected housing sales during April-June as compared to the previous quarter.
Cement and steel prices hiked drastically
CREDAI President Harsh Vardhan Patodia said, “There has been a huge increase in the prices of cement and steel during the last one year. Hence housing prices are likely to rise in the medium to long term. He said that developers are forced to increase the price as they are not in a position to absorb the increase in construction cost on their own. The association has written several times to the government about controlling the price of cement and steel. It has also been complained to the Competition Commission of India.
According to CREDAI, 90 per cent of real estate developers believe that the second wave of COVID-19 has been more ‘disastrous’ for their business than the first wave. According to a survey conducted by CREDAI, there has been a sharp decline in new residential sales and collections since April. Most developers fear delays in projects due to the lockdown in many states.
The danger of these challenges
Developers have threatened challenges such as labor shortage, financial constraints, delay in approvals, increase in construction cost and weak customer demand. At the same time, according to the report of international property consultant Knight Frank, India has been ranked 55th in terms of housing price increase globally during January-March 2021. The Gulf country Turkey has been in the first place with 32 percent price increase in the same period. In India, there has been a decline of 1.6 percent in housing prices during the January-March quarter this year as compared to the fourth quarter of 2020.
Knight Frank released its ‘Global House Price Index – Q1 2021’. It monitors the movement of housing prices in 56 countries and territories globally. Earlier, India was ranked 56th in the report released in March. Now India has moved up one place to 55th position and is only ahead of Spain in the list of 56 countries around the world.
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