In Karnataka, real estate developers are set to increase home prices by 3-8% starting June 10. This decision stems from a significant rise in both construction material costs and labor expenses.
According to Balakrishna Hegde, who is the president of the Karnataka unit of the Confederation of Real Estate Developers’ Associations of India, the increase in prices was deemed “inevitable.” He pointed out that steel prices have surged by 24% compared to their levels in January, while cement prices have skyrocketed by 56% since the start of the year. This adjustment marks the first in what might turn into a series of price hikes for residential properties.
CREDAI, representing a coalition of 124 real estate companies, encompasses many of Karnataka's leading property developers.
Mr. Hegde elaborated on the situation, stating, “Rising input costs have affected the cost of construction very harshly, increasing development costs by 20%-30%, depending on the stage of construction. Our members will increase prices by Rs 75 to Rs 500 per sq ft based on the location and the stage of construction.”
As commodity prices escalate, influenced by soaring oil prices, this adjustment could be the beginning of several price revisions for residential properties.
“What we are passing on is only a small portion of the increased cost of construction. We do not want to pass on the entire burden at this stage, but will review the situation and take appropriate steps in the coming months,” he added.