Price rise problems

Price rise problems
Published: 24 March 2004

India real estate builders could be heading towards tougher times with prices of steel and cement flaring up. As per a Confederation of Real Estate Developers Association of India (CREDAI) estimate, construction costs may go up by about 17.5 per cent for every 1000 sq ft if the current prices of construction raw materials like steel and cement remain same.  It is estimated that housing construction requires up to 45 bags of cement for every 100 sq ft and 3 to 3.5 kg of steel per sq ft.  At current prices, it translates to Rs 70 per sq ft of cement and Rs 100 per sq ft of steel.  But as most housing contracts have no mention of escalation fees, the developers are not able to pass the burden to customers. However, they could be looking at jacking up construction costs for upcoming housing and retail projects. The real estate associations have urged the government to take immediate steps to curb hikes