Due to constantly rising raw material prices, notably for steel and cement, developers have announced an increase of Rs 400-500 per square foot in property prices.
The announcement was made at Credai Gujarat’s board meeting on Tuesday in Palanpur, and it will apply to all 40 city chapters of the developer’s body.
Ajay Patel, chairman, Credai Gujarat, said,”Prices of steel and cement have dramatically increased because of which the profitability of developers is being eroded significantly.” Patel added: “So far, most developers have absorbed costs but with the constant surge in prices, input costs are increasing.”
He added “Therefore, prices of properties will go up effective April 2, be it commercial or residential, across Gujarat.”
Apart from steel and cement, developers claim that the cost of hardware, glass panels, and other raw materials has risen significantly.
While steel prices have risen to Rs 80,500 per tonne, cement costs Rs 430 per bag, increasing construction costs in ongoing projects. Steel prices were around Rs 60,000 per tonne at the end of December, while cement was around Rs 325 per bag.
The Gujarat Contractors’ Association (GCA) had been requesting for a long time that the government revise project costs to reflect rising prices.
The state government recently allowed a rise in property prices up to a maximum of 5% in response to the rise in raw material costs, heeding their request.