Even as the Central government looks to give a boost to affordable housing, the 20-35% hike in prices of raw material, which would in turn hike the cost of construction, is likely to make houses unaffordable in Mumbai.
The price of bricks has now risen to Rs6,200 for 1,000 pieces, from Rs4,500 a month ago. Price of cement too has peaked to Rs350 for a bag from Rs300 last month and Rs250 in February. Price of steel has increased to Rs42,000 a tonne from Rs38,000 in the past two months. Builders claim the cement cartel is making the projects unviable by increasing the prices.
“The construction industry will be hit badly if this continues. We will be unable to fulfill the government’s promise of housing for all,” said Rajan Bandelkar, vice-president, National Real Estate Development Council (NAREDCO), West.
Bhavesh Sanghrajka, chairman and managing director, Shraddha Lifescapes, said, ”Builders constructing affordable houses operate on thin margins. A hike in price of raw material will impact the final sale price.”
Real estate experts say the government needs to intervene. “The government needs to provide a subsidy for raw material at least for those constructing affordable houses,” said Ajay Chaturvedi, a real estate expert.