Construction costs have risen by 10-20 per cent due to the sharp rise in steel and cement prices, Credei, a top firm of real estate developers, said Thursday. Given this situation, housing prices are likely to rise in the medium to long term. “The second wave of Kovid-19 has seen a sharp drop in home sales since April,” Creedy president Satish Magar told a virtual press conference.
However, they did not provide any data on expected residential sales declines during the April-June period compared to the previous quarter. Credai President Harsh Vardhan Patodia said, “There has been a huge increase in the price of cement and steel in the last one year. Housing prices are therefore likely to rise in the medium to long term. He said developers were forced to raise prices because they were not in a position to absorb the increase in construction costs. The association has written to the government several times to regulate the price of cement and steel. It has also been lodged with the Competition Commission of India.
More destructive to second wave real estate
According to Creedy, 90 percent of real estate developers believe that the second wave of COVID-19 is more ‘damaging’ than the first wave for their business. According to a survey by Creedy, there has been a sharp drop in new residential sales and collections since April. Many developers delay projects due to lockdown in several states. Developers have threatened challenges such as a shortage of workers, financial constraints, delays in approvals, increased construction costs and weak demand from consumers.
India ranks 55th in terms of housing prices
At the same time, India is ranked 55th in terms of growth in housing prices globally for the period January-March 2021, according to a report by international property consultant Knight Frank. During the same period, Gulf Country Turkey topped the list with a 32 percent price increase. Housing prices in India fell 1.6 per cent in the January-March quarter of this year compared to the fourth quarter of 2020.
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Knight Frank released its ‘Global House Price Index – Q1 2021’ on Thursday. It tracks the movement of housing prices in 56 countries and territories globally. India was ranked 56th in a report released in March. India now sits at 55th position, ahead of Spain in the list of 56 countries in the world.