Real estate prices set to shoot up in Kolkata

August 7th, 2008 - 2:07 pm ICT by IANS  

Kolkata, Aug 7 (IANS) Industry players expect real estate prices in the city to shoot up soon due to rising input costs. “Like other sectors, the real estate sector has also been badly affected by ever increasing prices,” Pradeep Sureka, president of the Bengal chapter of industry lobby Confederation of Real Estate Developers of India (CREDAI), told the media here Wednesday.

“Over the last few months construction costs have gone up due to the continuous increase in prices of steel and cement, labour and staff wages and interest rates,” he said.

“The cost push is being further fuelled by ever increasing sanction fees, various government taxes such as service tax, value added tax, stamp duty and so on.

“Hence, it is no longer possible for our member developers to absorb the increasing costs.”

Key construction materials such as cement and steel have witnessed a lot of price fluctuation.

Cement prices have gone up 39 percent in the last three years, of which a 13 percent hike has come about during the last one year alone, Sureka said.

Steel prices too have increased by 107 percent in the last three years and by as much as 60 percent during the last one year.

The developers said if steel manufacturers decide to hike prices to global levels by this month-end, the revision in real estate prices could be as high as Rs.600 to Rs.1,000 per square feet.

Real estate prices have soared in Bangalore, Delhi and Mumbai respectively by 28.8 percent, 19.1 percent and 18.6 percent during the last few years due to higher input costs.

CREDAI national vice-president Santosh Rungta ruled out chances of any downward price correction in the city as has happened in other metros.

The association has decided to raise realty prices only after Home Front 2008, a property show initiated by CREDAI Bengal, showcasing a comprehensive bouquet of housing projects in the state.

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