Planning to acquire your ideal home? Now might be the opportune moment to seize that dream residence at a favorable price. Following a consistent uptick in raw material costs—predominantly steel and cement—real estate developers have forecasted price hikes of Rs 400-500 per square foot. This revelation emerged from an assembly of members belonging to Credai Gujarat, impacting around 40 municipal chapters of the developer association.
This pivotal decision took shape during a board meeting held by Credai Gujarat on Tuesday in Palanpur. For developers, the surge in raw material prices has been a significant concern for an extended period.
Currently, steel is priced at Rs 80,500 per tonne, while cement stands at Rs 430 per bag, which has escalated the construction expenses tied to ongoing projects. Back in December, steel prices hovered around Rs 60,000 per tonne, with cement being Rs 325 per bag during that timeframe.
Not only developers are affected; the rise in steel and cement prices has also put construction contractors on high alert. The Gujarat Contractors Association (GCA) has long been advocating for a governmental review to adjust project costs in accordance with these increasing prices. Recently, in response to the rising raw material costs, the state government endorsed a price increment of up to 5% for properties.
Constant Surge in Prices is A Major Problem
Ajay Patel, the chair of Credai Gujarat, articulated that the steep rise in steel and cement prices has considerably squeezed developer profit margins. Although developers have historically absorbed these rising costs, the relentless influx of expenses cannot be overlooked any longer. He noted that, in addition to steel and cement, prices have also escalated for hardware items like glass panels and various other raw materials. As such, property prices for both commercial and residential sectors in Gujarat are slated to increase starting April 2.