House prices will go up by 10 per cent, warns Credai
Chennai: At a time when real estate industry is facing issues over the shortage of sand and increasing cost of construction materials, Confederation of Real Estate Developers' Associations of India (Credai), a body of private real estate developers expressed apprehension over the increasing cost of houses and flats.
Credai Chennai president Suresh Krishn said that the cost of the sand has increased by 75 per cent over a period of six months. “Six months ago the sand price was Rs 35 per cft. Now the cost has increased to Rs 135 per cft. The cost of one bag of cement has increased to Rs 330 from Rs 270 and one tonne of has steel gone to Rs 47,000 from Rs 34,000. Cost of ceramic tiles and electrical products has also increased. Due to this, construction cost has increased by Rs 400 per sq.ft,” Suresh Krishn said on Wednesday.
He also added that the industry had expected the GST would bring down the construction cost. But the shortage of raw materials hinders benefits to the customers. “We have to pass on the burden of increased cost over the customers. Mostly, the cost of ongoing projects (nearing completion) will not increase for now. But the future projects may cost more than 10 per cent of the present cost,” Suresh Krishn added.
According to the Credai, for last 2 years, no new projects have been commenced in Chennai and it is the only city in the country where the real estate industry plummeted. Due to stalling of the industry, demand for houses will rise and industry could not be able to supply to the demand, thus further increasing the price.