Telangana: Real estate industry to halt work on April 4 to protest against rising prices
Hyderabad: Members of real estate industry bodies have decided to halt construction work for one day on April 4 across Telangana to protest against the increase in prices of input materials like steel, aluminum, cement and others. Representatives of various real estate bodies, at a press conference on Friday, flagged the increase in price of […]
Hyderabad: Members of real estate industry bodies have decided to halt construction work for one day on April 4 across Telangana to protest against the increase in prices of input materials like steel, aluminum, cement and others.
Representatives of various real estate bodies, at a press conference on Friday, flagged the increase in price of input materials. They said the hike was steep and will impact project costs, hamper cash flows and hit working capital for the developers. About 600 affected developers will pass on the costs, resulting in a price rise for home buyers.
“The past two years were challenging for the sector due to the pandemic. The present increase in costs for materials like steel, aluminium, copper, PVC pipes, is steep and is severely impacting the cash flows of developers. Rising diesel costs is also pushing the cost of raw materials further. Developers have tried to absorb the costs. We may need to consider stopping work on the projects till the prices cool down or continue work and pass the increased cost to the customers. In either scenario, the property cost will go up in the range of 10 to 15 per cent,” said P Ramakrishna Rao, President, Confederation of Real Estate Developers’ Associations of India (Credai) Hyderabad.
Steel was priced at around Rs 40,000 to Rs 45,000 per tonne last year. It has touched Rs 85,000 to Rs 90,000 this year. Aluminum prices also went up by 45-50 per cent. Cement prices are on an upward spiral. “The government should set up a regulatory body on the lines of RERA to regulate prices of building materials. Previously, there was an input tax credit. This allowed the developers to offset some of the taxes paid. At the State level, the government can consider lowering registration costs or announce special rates for a set time period. This will infuse positivity in the sector and drive sales,” said V Rajashekar Reddy, Credai Hyderabad General Secretary.
Real estate projects have gestation period of 1 to 4 years. The builders walk into the trouble if the price rises from 15 to 100 per cent as in the present case. Some builders are forced to pause construction work. They are hoping to restart after the commodity prices come down. Delay in project execution will also hit the livelihood of those depending on the sector, said Ch Ramchandra Reddy, Credai Telangana Chairman.
Credai Telangana President D Murali Krishna Reddy, Telangana Real Estate Developers Association President Sunil Chandra Reddy, Telangana Builders Federation President C Prabhakar Rao, Telangana Developers Association President G V Rao and others presented the challenges that the real estate industry was facing.
They said the State government’s decision to hike stamp duty and revision of property values has also impacted the demand. The State government can consider reverting to the old regime of stamp duties on the projects to boost market sentiments, the members said. The developers will increase the costs of ongoing projects and the unsold inventory to deal with the impact of rising prices, they said.
