The Real Estate Sector, which is already reeling under the impact of the pandemic is being further pushed to a crippling crisis due to the steep hike in the cost of sand, cement and steel and transportation, said realtors here on Friday.
Addressing a media conference, Kantilal Patel, president, CREDAI Bhubaneswar Foundation said real estate is one of the major sectors which were badly hit by the pandemic as there was a shortage of raw material and labour.
Just went the industry was trying to revive, the rise in the price of the materials like steel, cement, sand etc has shattered hopes of an early revival, he said.
The price of steel, was between Rs 43,000/- and Rs 48,000/- .in 2020, now ranges between Rs 58,000/- and Rs 65,000/-, a tonne. The corresponding rates for cement, which ranged from Rs 200/- to Rs 250/- .for a 50kg bag, now costs between Rs 300/- and Rs 350/-. All construction-related materials like electrical materials, tiles, sanitary ware etc have increased putting an additional cost of Rs 1000 per square foot to the builders.
The cost of construction has increased by 40 to 50 per cent in Odisha. The builders are worried a lot as they would have to bear the extra cost amounting to nearly Rs 8 lakh to Rs10 lakh per unit if the cost escalation were to be borne by them in view of the RERA rules, said CREDAI. Umesh Patnaik, general secretary, CREDAI Bhubaneswar Foundation said the costs have led to delays in the completion of housing projects.
As the builders have already entered into an agreement with the buyers under the Real Estate (Regulation and Development) Act (RERA), they are clueless as to what to do. For new projects, the increase in prices can be passed on to the buyers but it may not be possible for already existing agreements under the RERA.