INDORE: High fluctuations in cement and steel prices caused by a spur in infrastructural activities, is likely to hit real estate business. Increased prices of raw materials will spoil plans of the realtors expecting to revive themselves after last year’s slump.
Industry participants said that rise in cement prices has increased the cost of project and has squeezed margins of real estate developers.
Liladhar Maheshwari, chairman, confederation of real estate developers of India (CREDAI) said, “Prices of cement are not uniform and varies frequently that makes real estate project expensive. Higher prices of construction raw material in an already sluggish real estate market will spoil our expectations of a revival in an affordable segment post budget announcements.”
Industry participants said that cement is offered at the range of Rs230 to Rs 260 per bag (1 bag is of 50 kg) in the city’s market. Steel is quoted at Rs 33,500 to Rs 36,000 a ton.
Real estate developers and cement dealers of Indore expect a rise in cement prices from the current levels in coming months owing to government’s increased budgetary allocation for highways, railways, and other infrastructure projects, which are the biggest consumers of cement.A leading cement dealer from Indore said, “Prices of cement will get a boost this season from increased infrastructure and residential projects.”
Cement and steel prices increases every year after rains as construction activities gain momentum, but this season it was not raised immediately post monsoon due to a slump in the real estate market.
CREDAI Indore chapter president Vijay Gandhi said, “New real estate projects will be introduced in March. We are hoping for some recovery in the sector that time.”
Real estate developers expect a recovery in property demand mainly from the service class in the next fiscal year on supportive government policies.