Kochi’s real estate sector records surge in raw material costs

The real estate sector in Kochi, which is expecting a revival from the Covid-induced losses, is now witnessing a surge in raw material costs.

Managing Director of Asset Homes and Executive members of the Confederation of Real Estate Developers' Associations of India (CREDAI) Kochi told the media that there would be a surge in demand in Kochi like it is happening in other parts of the country. He also said that the cost of construction in Kerala had increased considerably during the Covid-19 pandemic, making it unaffordable.

He said that the construction cost has increased due to two ways. Firstly, due to the price hike of raw materials, which comes around Rs 350 per sq ft and secondly, because of the 500 due to the unavailability of the Goods and Services Tax (GST) input tax credit. The price per sq ft has increased to Rs 850 in Kochi.

Kochi's real estate sector relies mostly on non-residents Keralites (NRKs). Leaving the affordable housing projects, NRKs make up 60% of the total clientele. This segment will strengthen if the borders are opened, and air travel becomes cheaper, he said.

According to the National Housing Bank (NHB) Residex, the carpet area prices of real estate properties have been surging steadily over the last seven years. In total, the carpet area prices in Kochi increased to Rs 6,843 per sq ft from Rs 4,288 per sq ft, which is a 60% growth in seven years.

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