40% steel price hike in 2 years pushes up property rates

Builders’ association has written to the Prime Minister’s Office asking for intervention.

With a 40% hike in steel rates in the last two years ensuring prices of houses remain high,the Confederation of Real Estate Developers of India (CREDAI), an association of builders, have written to the Prime Minister’s Office (PMO) requesting its intervention in the matter. Steel rates have increased to ₹51,000 — ₹54,000/kg from ₹29,000 — ₹32,000/kg in 2016.

Steel rates have increased to Rs51,000-Rs54,000/kg from Rs29,000-Rs32,000/kg in 2016. (HT File Photo/Used for representational purpose)

CREDAI requested the PMO to intervene and arrest undue hikes in the prices of steel.

“It is imperative that the government intervene and regulate prices for the benefit of all stakeholders of real estate, especially consumers, who have to bear the brunt of the cascading effects of increase in costs,” said Jaxay Shah, president, CREDAI.

Shah rued that the increase in rates harms the government’s ambitious programme of ‘Housing For all by 2002’.

“The continuous steel price hikes are increasing housing prices. Developers are grappling with the dire situation of sourcing raw materials leading to obstacles in completion of real estate projects,” he said.

The real estate sector is still plagued by slowdown from the last few years.

Builders have been saddled with huge taxes and premiums and also have to bear the increased cost of raw materials. The result is the exorbitant price of projects which put off homebuyers who postponed their purchase plans.

Additionally, banks and financial institutions also tightened lending norms.

However in recent times, there has been some easing with the interest on home loans coming down.