Feeling The Squeeze

Builder feel the squeeze as construction costs rise sharply
Sandie Clarke/Unsplash


Housing Prices - Stable 👌
Income Levels - Increasing 👍
Construction Costs - Increasing 😓
Builder's Margins - Disappearing 😖

Rapidly increasing input/construction costs cannot be absorbed infinitely, say real estate developers squeezed between stagnant prices and soaring material costs. 

As a result, some price increase will become inevitable, setting off a domino effect of delaying /postponing demand fulfilment - a concern for the entire economy. 

What's Going Up?

Apart from demand, everything. Lately, construction materials like steel, cement, resin, PVC pipes and cables, have all seen price hikes between 30% to 50%. 

With the slow rising demand for property and the sector's hopes pinned on the upcoming festive season, touching that price tag is akin to committing suicide.

Spanner In The Works 

Sunil Kumar, executive member, CREDAI Kochi, told the Times, "construction costs have gone up in two ways — the first being the higher prices of raw materials, which comes to around INR 350 per sq. ft. and second, INR 500 due to the unavailability of GST input tax credit." 

"In effect, the per sq. ft. price has gone up by INR 850 in Kochi. A boom might be coming in Kochi too, but the question now is whether the market will be able to absorb the increase in construction costs," Sunil added.

🌏 The peril of rapidly increasing material costs in construction, is now a global phenomenon, BTW.
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