'Property prices to increase by 10% in city'

KOLKATA: Experts in the real estate and construction industry on Friday stated that property prices in the city would go up by at least 10 per cent due to the sudden increase in prices of raw materials.

"Lockdown, migration of labourers, increased prices of fuel and shortage of skilled and unskilled labour have had an adverse impact on the real estate sector and the prices of the new properties are likely to be increased by Rs 350 to 400/sq ft," Sushil Mohta, president, CREDAI, West Bengal said.

According to Nandu Belani, president, CREDAI, Bengal, it is imperative that something needs to be done to balance the rise in the cost of major construction materials and labour cost. "In the current situation, real estate developers will only get some breathing space if we increase project prices by 5 to 10 per cent," he added.

The construction cost has gone up by 12 per cent in the past one year and the labour cost has increased by about 20 per cent. Further, fuel prices have also gone up. It had a considerable impact on the real estate industry. The cost of cement per bag varied from Rs 265 in January, 2020 to Rs 250 in October 2020 to Rs 300 in March 2021 to Rs 270 in October 2021. Price of steel per kg increased from Rs 45 in January, 2020 to Rs 62 per kg in October, 2021. Price of diesel per litre increased from Rs 68 to Rs 92 per litre.

"We see an approximate 10 per cent increase in project costs over the next 6-12 months for both fresh launches and unsold inventory. Home buying is a sensitive decision for families and individuals and it is our responsibility to inform our buyers about the reasons for an imminent price hike we foresee," Sidharth Pansari, senior member, CREDAI, West Bengal, said.

Mohta has urged the Central government to bring back the input tax credit to help the industry grow. Real estate sector is not only a major contributor to the national GDP but also an important employment provider in the country.