The Confederation of Real Estate Developers’ Associations of India (CREDAI) has written to the Prime Minister’s Office for an intervention to arrest the steep rise in steel prices, which are adversely affecting the government’s ‘Housing for All’ target.
The increase in prices of steel in the past six months has escalated input costs for the real estate sector, making housing less affordable for lower income groups. “It is imperative that the government intervene and regulate prices for the benefit of all real estate stakeholders, especially the consumers, who have to bear the cascading effects of increase in costs,” Jaxay Shah, President, CREDAI said.
Steel prices have shot up from Rs 29,000 to 32,000 per tonne in 2016 to Rs 51,000 to 54,000 per tonne, an increase of about 40 per cent. With the recent hike in import duty on steel, the real estate sector is faced with further hikes in domestic prices. While, the import duty has been introduced to deter imports and encourage ‘Make in India’, domestic suppliers see these prices as an opportunity for an extortionary price hike, it said.
The undue hike in prices is a huge deterrent for investment in real estate and its growth as it burdens the sector with an additional cost of Rs 90 to 180 per square feet, depending on other variants such as height, basement, etc. “In the government’s desire to aid the steel manufacturers, the ancillary industries are grappling with raised raw material prices, hurting consumers.
Shah also said developers were finding it tough to source raw materials, leading to obstacles in completion of real estate projects. The government needs to keep a check on this trend in order to further aid the growth of Indian realty, he added.
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