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Housing prices may go up 10-15 pc on rise in construction cost: CREDAI-MCHI

  Realtors’ body CREDAI on Monday said the cost of construction has gone up by 20-25 per cent, mainly during the last 45 days, due to steep rise in prices of raw materials like steel, and builders will be forced to increase property prices from next month by an average 10-15 per cent.
CREDAI-MCHI, the Maharashtra chapter of CREDAI, demanded that the central as well as state governments consider giving relief to the industry by reducing stamp duty and GST rates, besides allowing input tax credit (ITC) to developers.
The association said it would not advise member developers to stop construction works as of now, but if the price rise continues then builders would have no option but to halt works at project sites and defer purchase of raw materials.
Recently, CREDAI-NCR had issued a statement that it was considering stopping construction works and also halt purchase of raw materials.
“Steel prices have gone up from Rs 35-40 per kg to Rs 85-90 per kg. Cement prices have gone up by around Rs 100 per bag. Fuel and transportation costs have gone up. This has resulted in an increase of 20-25 per cent in the overall construction cost,” CREDAI-MCHI President Deepak Goradia told reporters in a press conference.
Association’s secretary Dhaval Ajmera said the construction cost has gone up by Rs 400-500 per square feet, primarily in the last 45 days, affecting the affordable housing segment the most.
He demanded that the Maharashtra government consider reducing the stamp duty from 5-6 per cent to 3 per cent to mitigate the impact of sharp rise in raw material prices, which have gone up due to the geo-political situation.