Real Estate: Demand for cheap homes may decline as a result of the rising cost of cement, and infrastructural projects will also be impacted
Real Estate: According to the industry, cement prices have declined in the last five months due to weak demand. National Real Estate Development Council (NAREDCO) Chairman Niranjan Hiranandani said the demand for affordable houses is already weak.
The building of reasonably priced homes may be hampered by the nationwide increase in cement prices. Additionally, the cost of buying residential properties may increase for customers. The sale of homes will probably be impacted by this.
Affordable housing is already being built at a sluggish pace, according to real estate industry officials. Currently, large-scale construction projects, infrastructure projects, and retail customer purchases may be impacted by the increase in cement prices. Shortly, the real estate sector will be able to witness its effects.
Over the past week, cement prices increased by Rs. 10-15 per bag in North India, Rs. 30–40 per bag in Central India, and Rs. 20 per bag in Western India.
According to the industry, cement prices have declined in the last five months due to weak demand. National Real Estate Development Council (NAREDCO) Chairman Niranjan Hiranandani said the demand for affordable houses is already weak. Due to the increase in the price of cement, it will become out of reach of the people. Other costs will also increase.
The rise in cement prices may require builders to reevaluate their budgets as the price rise impacts construction costs by Rs 4 to 5. In such a situation, they can add it to the potential price of their project.
India is the second largest producer of cement in the world. Its share in global installed capacity is more than 8 per cent. According to CRISIL Ratings, the domestic cement industry has added 80 million tonnes of cement capacity in 2023-24 due to spending on housing and infra activities. This is the highest in the last 10 years. Cement consumption may reach 45 crore tonnes by financial year 2027.
In the January-March quarter this year, house sales in the country increased by 68 per cent in terms of value to about Rs 1.11 lakh crore. In the same period last year, houses worth Rs 66,155 crore were sold. According to PropTiger, there was a growth in major cities in terms of both quantity and value in January-March.
