Buying a new home to cost more, Credai urges government to step in

With the prices of basic building materials, including steel, cement, concrete, tiles and paint, steadily increasing, those planning to buy a new home will now have to shell out more as the cost of construction is expected to increase by almost 300 to Rs. 400 per square foot.

According to CREDAI-Pune Metro, the price hike will impact the real estate sector, which was on the road to recovery after the second wave of Covid-19.

Experts said rising construction costs could negatively affect the industry, which has already been hit by foreclosure, labor migration and soaring fuel prices. In particular, the real estate sector is a major contributor to the country’s GDP and offers employment opportunities to dozens of people.

According to CREDAI-Pune Metro, between 2019 and 2021, the price of cement went from Rs 275 to Rs 390-410 per bag, while the price of steel went from Rs 40 to Rs 56-57 per kg. Likewise, the price of concrete went from Rs 3,400 to Rs 5,600 per cubic meter.

Speaking on the matter, Anil Pharande, President of CREDAI-Pune Metro, said: “Rising prices of essential materials used in construction as well as rising labor and transportation costs have resulted in a sharp increase in construction costs. With an increase from Rs 300 to Rs 400 per square foot, buying a house will become more expensive in the near future. The cost of affordable housing projects is also expected to increase significantly. “

Experts said the real estate sector is the second largest generator of jobs in the country and contributes 5-7% of the GDP. “Governments must find a solution to prevent the prices of essential materials from continuing to rise. We urged governments to act urgently in the interests of home buyers, ”he said.

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