Property cost to surge due to sharp rise in construction costs: CREDAI
Real Estate

Property cost to surge due to sharp rise in construction costs: CREDAI

The Confederation of Real Estate Developers' Association of India (CREDAI) has expressed concern over the continued surge in the cost of construction raw materials comprising cement and steel.

Historically, costs of almost all materials and commodities surge whenever there is a steady rise in fuel cost but the costs of construction raw materials have been surging steadily since January last year.

Additionally, the setbacks in construction due to lockdowns, curfews, shortage of labour resulted in rising labour prices leading to a direct jump in construction cost between approximately 10% to 15% in the past 18 months.

Developers emphasise that this is a multifaceted problem since RERA does not allow the flexibility to increase the selling price even if the construction prices increase substantially.

CREDAI wrote to several central government departments expressing concern over the steep increase in costs of materials and has been emphasising the problem on many platforms. If the costs of higher raw materials do not start reducing in the immediate future, there is a high probability that the costs of residential properties will increase by 10 -15% to balance the enhanced construction cost.

President, CREDAI National, Harsh Vardhan Patodia, told the media that they have been consistently observing a sharp jump in the raw material costs over the past year and do not appear to be declining or stabilising soon. The developers may not be able to handle increasing costs and unfortunately may have passed on the burden onto homebuyers.

CREDAI requests the government and relevant Ministries to look into this problem and handle the cost increase at the earliest. CREDAI says one method of addressing this issue could be to allow an increase in costs by enabling a clause in the buyer-seller contract.

The government may additionally consider either enabling Input Tax Credit for real estate projects and/or rationalisation of GST on different construction raw materials from their present values as this would have decreased the costs of residential properties immediately. If these measures are not taken immediately, property values across all sectors will surge directly impeding affordable housing & housing for all missions of the government.

Image Source

The Confederation of Real Estate Developers' Association of India (CREDAI) has expressed concern over the continued surge in the cost of construction raw materials comprising cement and steel. Historically, costs of almost all materials and commodities surge whenever there is a steady rise in fuel cost but the costs of construction raw materials have been surging steadily since January last year. Additionally, the setbacks in construction due to lockdowns, curfews, shortage of labour resulted in rising labour prices leading to a direct jump in construction cost between approximately 10% to 15% in the past 18 months. Developers emphasise that this is a multifaceted problem since RERA does not allow the flexibility to increase the selling price even if the construction prices increase substantially. CREDAI wrote to several central government departments expressing concern over the steep increase in costs of materials and has been emphasising the problem on many platforms. If the costs of higher raw materials do not start reducing in the immediate future, there is a high probability that the costs of residential properties will increase by 10 -15% to balance the enhanced construction cost. President, CREDAI National, Harsh Vardhan Patodia, told the media that they have been consistently observing a sharp jump in the raw material costs over the past year and do not appear to be declining or stabilising soon. The developers may not be able to handle increasing costs and unfortunately may have passed on the burden onto homebuyers. CREDAI requests the government and relevant Ministries to look into this problem and handle the cost increase at the earliest. CREDAI says one method of addressing this issue could be to allow an increase in costs by enabling a clause in the buyer-seller contract. The government may additionally consider either enabling Input Tax Credit for real estate projects and/or rationalisation of GST on different construction raw materials from their present values as this would have decreased the costs of residential properties immediately. If these measures are not taken immediately, property values across all sectors will surge directly impeding affordable housing & housing for all missions of the government. Image Source

Next Story
Infrastructure Urban

India To Invest $37 Billion To Boost Petrochemical Capacity

India is set to become a major global player in the petrochemicals industry, driven by a planned capital expenditure of $37 billion (Rs 3.1 trillion) aimed at reducing import dependency and enhancing self-sufficiency, according to S&P Global Ratings.In its latest report titled “First China, Now India: Self-Sufficiency Goals Will Add To Petrochemicals Supply”, S&P said India’s large-scale capacity expansion—mirroring China’s earlier push—will likely intensify oversupply pressures in Asia’s petrochemical markets.Currently the world’s third-largest petrochemical consumer a..

Next Story
Infrastructure Transport

Indian Railways Expands Global Exports Of Rail Equipment

Indian Railways has announced that it is rapidly emerging as a global exporter of railway equipment, including bogies, coaches, locomotives, and propulsion systems, under the government’s ‘Make in India, Make for the World’ initiative.According to an official statement, India’s railway products are now reaching over 16 international markets, reflecting the country’s growing capacity to design, develop, and deliver world-class rail solutions.Metro coaches have been exported to Australia and Canada; bogies to the United Kingdom, Saudi Arabia, France, and Australia; propulsion systems t..

Next Story
Infrastructure Transport

RailTel Awards Rs 163 Million Contract To RTNS Technology

RailTel Corporation of India Limited (RailTel), a Mini Ratna Public Sector Undertaking, has awarded a domestic work order worth Rs 163 million to RTNS Technology Private Limited.The contract, issued on 30 September 2025, involves the supply and installation of equipment and related services for one of RailTel’s key customers. The project underscores RailTel’s commitment to advancing technology and communication infrastructure through collaboration with domestic system integrators.RTNS Technology Private Limited, an ISO-certified system integrator, provides comprehensive solutions for perim..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?