M A I N   N E W S

Realtors may hike property prices
Ruchika M. Khanna
Tribune News Service

The building factors Increase in the rate of raw material, especially cement and steel. Acute shortage of labour, which has led to revision in workers’ wages. Imposition of 10 per cent service tax by the government on builders.

Chandigarh, April 11
A time when investors were happy at the markets bouncing back and the economy once again taking the growth track, here is a bad news for those wanting to invest in property: the discount period in housing schemes is over and an upward revision in prices is now imminent.

Not only have the builders stopped offering discounts, they are also planning to increase the prices of their units by May, citing the increasing prices of raw material like cement and steel. Then acute shortage of labour, which has pushed their wages up, is another factor the realtors are quoting.

Contemplating a hike of five to 10 per cent, the realtors claim the imposition of 10 per cent service tax on them from May 1 has made the revision in prices of most “affordable” housing schemes inevitable.

Notably, the prices of cement have, over the past month, gone up from Rs 245-250 to Rs 270 per bag. Similarly, steel prices have shot up from Rs 29,000 per metric tonne last month to Rs 34,000 per metric tonne. And as there is a shortage of construction labour, those willing to work are demanding higher wages. The labour charges, it is learnt, have gone up from Rs 75-80 per square feet six months ago to Rs 100-110 now. All these factors together resulting in an increase of about 15 per cent in the input costs for builders.

Kulwant Singh, managing director of Janta Land Promoters, says the affordable housing schemes were started at a time when the economy was passing through a recessionary phase. “At that time, the supply was exceeding the demand and builders started offering discounts in order to sell their projects. But as no new housing schemes were launched over the last two years, the demand-supply gap has been leveled.”