Kochi's realty sector in a material crisis

Thomas V J, a native of Kakkanad, has been putting all his effort and savings into the home he has been building for the past three years.
Image used for representational purpose only (Photo | Pexels.com)
Image used for representational purpose only (Photo | Pexels.com)

KOCHI: Thomas VJ, a native of Kakkanad, has been putting all his effort and savings into the home he has been building for the past three years. The huge economical impact of the pandemic, the subsequent lockdown and the skyrocketing prices of construction materials have put all his plans in doubt. With little or no resources available, the sexagenerian paused the construction of his home in June. Thomas’s is not a rare care. Many builders and homeowners are feeling the heat of the material crisis.

The price of cement has touched Rs 460 last week and has increased by as much as Rs 50 daily. In June, it had crossed Rs 500. “It is quite hard to survive under these circumstances. Despite being bulk order customers, we get no discounts from dealers. We are desperately trying to recover from the impact Covid has had on our business, and this is really not helping,” said Varghese John, a small-scale builder from Aluva.

Builders claim that dealers are cashing in on this chaos. “Many dealers keep highlighting the increase in coal prices to justify the peaking price of building materials.  Though the government aims to scale up production at Malabar Cements to meet 25 per cent of the demand, procedures are yet to be initiated. How long do we need to wait?” said another builder who wishes to stay anonymous. 

Prices of materials like iron, steel, PVC pipes and cement were also affected by the closure of several factories that made these items. “We have been witnessing a reduction in the import of steel from China for the last six months. We depend on expensive steel coming from states like Tamil Nadu, Chhattisgarh and Andhra Pradesh. Besides, a 30 to 40 per cent increase in demand is found in iron, PVC, plumbing materials, paint and quarry materials. Because of this price hike, the price of apartments has gone by Rs 850 per sq ft across Kochi,” said a builder.

No takers for completed projects
Apart from the concerns regarding ongoing projects, finished projects have not been getting many takers either, worrying builders. “We are going through a deep crisis. Many realtors have close to 10,000 unsold flats they are sitting on since April and have scaled down the rates for some respite. The ‘hybrid model’ in IT companies have also impacted the sector, with a low number of families choosing to stay in the cities,” said Usman K, a realty broker from Maradu.

Rs 850 per sq ft for flats
Builders hint that the price of apartments and flats has gone by Rs 850 per sq ft. “Due to these unprecedented price hikes, we are having to request customers to understand ground-level issues. Most of us have already decided to complete ongoing projects before venturing into new initiatives. It’s better to be safe than incur huge losses in the future,” said Ajith M, an architect.

With the unrestricted hike in the price of raw materials, the construction sector is staring at a deep crisis

Essential items like cement are touching sky-high rates and forcing many builders to opt for alternatives

Builders demand government intervention to address the issue that affects lakhs of workers

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The New Indian Express