BHUBANESWAR: Even as construction activities have resumed following the relaxation of Covid-19 lockdown, realtors have expressed concern over the sharp rise in prices of construction materials.
The State unit of Confederation of Real Estate Developers’ Association of India (CREDAI) said that the cost of construction materials, especially cement and steel, has increased by 40 per cent (pc) to 50 pc and the government has no control over it.
Stating that the housing prices may rise up to 15 pc if the cost of construction materials does not fall, the realtors’ apex body appealed to both the Centre and the State governments to initiate measures to control the prices. They suggested rationalisation of GST on raw materials. General secretary of CREDAI-Bhubaneswar Umesh Patnaik said the real estate players are facing problems on all fronts since the beginning of the pandemic, and now the price of materials shooting through the roof has added to their woes.
The price of steel, which was Rs 43,000-Rs 48,000 a tonne in 2020, now ranges between Rs 58,000 and Rs 65,000. The average cost of a 50 kg bag cement has gone up from Rs 200-Rs 250 to Rs 300-Rs 350, he said. “As the builders have already entered into agreements with the buyers under the Real Estate (Regulation and Development) Act, they cannot increase the cost of the house. As they are unable to absorb escalating costs, it will ultimately put the burden on the future home buyers,” he pointed out.
While the delay in construction caused by lockdowns and the shortage of labour has already resulted in a direct increase in construction cost, the burgeoning material prices will further leave the sector distressed which is yet to overcome the pandemic loss. President of CREDAI-Bhubaneswar Kantilal Patel said real estate is one of the major sectors which was badly hit by the pandemic.
The lockdown resulting from labour migration and shortage of raw materials affected the housing trade, he said. Urging the government to address the issue and tackle the price rise at the earliest, Patnaik suggested the government to allow sharing of escalated cost by adding a clause in the buyer-seller agreement.