Real Estate: Demand for cheap homes may decline as a result of the rising cost of cement, and infrastructural projects will also be impacted

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.