Property rates dip with cement prices

Hyderabad, Nov. 20: Realtors have finally got the upper hand of cement manufacturers. The latter has drastically reduced the price of cement due to the fall in the price of raw material. As a result, property prices have also come down in Hyderabad and other parts of the state.

Due to oversupply and poor demand, cement prices fell by 30-40 per cent, bringing cheers to the realty sector. A 50-kilo cement bag is now available for Rs 140-Rs 150 as against Rs 220 six months ago. Another major component of construction, steel, which cost Rs 32,000 now costs around Rs 27,000.

“Cement manufacturers who used to fleece the public with abnormal pricing have finally reduced the rates for various reasons. This will boost construction activity and help home buyers to get properties at affordable rates,” said Mr S.N. Reddy, president of the Builders’ Association of India-AP chapter.

However, the Cement Manufacturers’ Association of India says the price reduction is a consequence of the lower cost of raw material such as limestone. “Pricing of cement always depends on the raw material cost. So, it is unfair to level allegations of ‘abnormal pricing’ against the cement companies,” said a representative of the CMA.

For home buyers the lower rates are a major relief. Real estate companies have slashed rates by at least 25 per cent. For instance, in Gachibowli, where many software companies are located, premium and luxury flats priced at Rs 75 lakh are now available for between Rs 45-55 lakh in posh localities.

Flats that cost around Rs 40 lakh in and around Hitec City and Madapur are now going for Rs 25-30 lakh. In other areas such as Kukatpalli, Uppal and LB Nagar, realtors are offering 20 to 30 per cent discount on property prices. Some are luring customers with gifts such as cars, diamond necklaces, air-conditioners and laptops.

“With the slash in the cost of cement and other construction material, we decided to pass on the benefit to the customers. That is why we are offering personal gifts to home buyers,” said Mr S. Rami Reddy, managing director of First SMR Holdings Limited.

According to Mr G. Yoganand, the managing director of the Majeera Group, the fall in cement prices will greatly benefit future projects but not completed projects. On the outskirts of Hayatnagar, Sridhar Constructions is offering individual houses for merely Rs 16 lakh. “We had predicted the fall in cement and steel prices one year ago with the slowdown in the economy. That is why we fixed competitive prices for our project being constructed in Hayatnagar,” said Mr M. Sridhar Rao, managing director of the company.

Realty experts say the demand for residential space is picking up in the twin cities.