The GST Council’s move to slash tax on key construction materials from 28% to 18% could bring much-needed relief to the housing sector. Property experts say the change may cut project costs by 3-5%, reviving sluggish sales in Ahmedabad and across Gujarat, especially in the affordable housing segment.
Anuj Puri, chairman of ANAROCK Group, said developers building budget homes stand to gain the most, with better cash flows and margins. Affordable housing has been struggling, with its market share falling from 38% in 2019 to 18% in 2024, and new supply dropping from 40% to just 12% in the first half of 2025.
However, builders warn the benefits may be short-lived. CREDAI Ahmedabad GIHED president Aalap Patel said the cost cut will likely help projects still in early stages, but cautioned that cement cartels could quickly wipe out the gains.
CREDAI Gujarat president Tejas Joshi added that cement and steel prices, which form a large chunk of construction costs, often rise during September–March. Despite repeated demands for a Cement Regulatory Authority, no action has been taken, he noted.