Steady rise in the price of construction material, like cement, steel, bricks, coupled with a shortage of skilled labourers, has hit the realty sector in Gujarat, an office-bearer of state-CREDAI said.
Talking to PTI, Vice President of Gujarat unit of Confederation of Real estate Developers’ Associations of India (CREDAI), Vipul Thakkar said, due to the soaring raw material prices, shortage of labour and other factors, construction projects across Gujarat are getting either delayed, cancelled or stalled.
He said the realty business in many big cities in the state including Ahmedabad, Vadodara, Rajkot, Surat, Jamnagar and Bhavnagar, have been hit by this.
“The hike in cement prices by the manufacturers four times over the past one year has made the construction of a housing project a very costly affair. The cost of cement per bag has gone up to Rs.270 from Rs.170 over the past one year,” Thakkar said.
“The cartel of cement companies is responsible for this price rise and the intervention of Gujarat government is needed to resolve the issue,” he added.
“People interested in buying properties, have given it up as it is largely beyond their reach now. Besides this, big housing schemes will not be approved in the state without the clearance from the Gujarat Pollution Control Board, which is a new condition, which came into force some time back,” Thakkar said.
“Spiralling costs of significant construction material have been putting great pressure on project execution and it is difficult to keep the builders’ margins intact,” builder Ramesh Patel said.
“10.25 per cent service tax on sale deed in Gujarat and 0.60 paise VAT (Value Added Tax) on receipt of house purchase for becoming a member of a housing society is very high, which has made buying houses a costlier affair in Gujarat,” Patel added.
Land developer Suresh Patel said, “There is a shortage of land for the construction of houses in Vadodara and other cities. The cost of land will go down if the development plans are revised and more land is released.”
