Rising raw material prices will affect realty growth and increase property prices


The price of construction raw materials has been steadily rising over the past two months, affecting real estate.

At a time when real estate recovery in India is starting to show some green light, the second wave of the corona has hit the region again. If this is not enough, the problem is further complicated by the sharp rise in the prices
of major raw materials such as cement, iron, and steel.

According to industry sources, the increase in the price of these items is up to 100 percent in some cases. The developers say that this has limited the ability to come up with new offers and offer discounts to users. Last
year, a strict lockdown in the country led to various supply chain disruptions.

However, this year the various states in the country have only
partially locked down, allowing goods to be moved from one place to another. Yet the price of construction raw materials has been steadily
rising for the past two months.

Manoj Gaur, CMD, Gaurs Group, Vice President-North, CERDAI National, said, “The real estate sector has seen huge inflation of 50-100 percent in raw materials such as steel, cement, and PVC pipes over the past few months. These items are part of the largest raw materials used by industrial players. Since the implementation of RERA in the country, developers have not been
able to increase the value of the property after submitting their project details to the respective authorities. Therefore, inflation will
significantly affect the viability of the region, which is subject to the onslaught of this pandemic and the resulting lockdowns. It calls on the
concerned authorities to look into such irrational inflation.”

According to industry sources, the price of hot-rolled coil steel is above Rs
60,000 on most days of May, which is 75 percent higher than the average price in May 2020. Even compared to April 2021, this type of steel is up about 10 percent.

Amit Modi, Director, ABA Corp & President (elect), CREDAI Western UP, said, “The second wave of the Corona is already taking the wind out of ships for the real estate industry. On top of that, there has been a huge increase in the price of imported raw materials, which is a double whammy for us. It is more difficult to absorb all the input inflation. In the current scenario,
developers are being kicked out of all quarters.”

In May 2021, the price of cement in most parts of the country will be Rs 480. It was Rs 375 in May last year. This is an increase of about 28 percent over the past year.

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