Realty sector upset over rising prices of building materials

Visakhapatnam: Spiralling raw material prices are set to adversely hit the realty sector in Andhra Pradesh with no efforts in sight to regulate their sale.

Builders and developers feel that the realty sector may have to pay a heavy price if the trend continues unchecked. The biggest worry for them is the continuous rise of cement price due to formation of a cartel by the manufacturers and the short-supply of sand forcing many of the builders to procure it from distant areas at a higher price.

The cement price per bag comprising 50 kg has increased from Rs 225 to Rs 430 over the past few months. Similarly, the price of steel has gone up by 50 to 60 percent. Ever since the outbreak of pandemic two years ago, availability of labour mostly from neighbouring States has become difficult forcing the builders to spend more on construction workers, masons and sub-contractors.

Confederation of Real Estate Developers Association of India (Credai), Visakhapatnam Chapter has already expressed its anguish at the failure to regulate the rising prices and appealed to the government to regulate them.

Credai-AP joint secretary Peela Koteswara Rao told Bizz Buzz that the government should come to their rescue immediately as 90 per cent of buyers are from lower and upper middle class families.

Builders say that the increase in raw material prices has led to an additional cost of Rs 500 per sft for the apartments. Not only cement, steel and labour cost, the prices of pvc and drainage pipes, painting material, electric cables, switches and tiles have also undergone a steep increase.

Though the construction sector pinned high hopes on the Union Budget, there was disappointment over failure to confer industry status and rationalise GST. The reported decision by the State Government to increase land prices from April 1 has also created unhappiness in the realty sector.