Confederation of Real Estate Developers’ Association (CREDAI), the apex body of private real estate developers, on Monday tried to play down the impact of demonetisation and declared that the real estate prices were bound to increase in the New Year.
Admitting that they were partly hit due to demonetisation as a result of cash crunch and certain provisions of Real Estate Regulatory Agency (RERA) Act, CREDAI- Vizag chairman K. Ramakrishna Rao and president G.V.V.S. Narayana said increase in steel, cement and labour cost would cause increase in the prices of apartments in the city.
Scoffing at speculation that real estate prices would crash following demonetisation, they told reporters here that even before withdrawal of high denomination notes, they were brought under amended Income Tax Act which had made it mandatory for payments only through bank transactions.
“Only due to cash rationing, we are not able to pay wages to the workers,” they stated.
They said cement cost had gone up by Rs.230 to 250 per bag of 50 kg. Steel prices (TMT bars) have increased by 6,000 per tonne in one month. Similarly, sand cost has also witnessed steep increase from Rs.11,000 to Rs.24,000 per five units (lorry load of 17 tonne).
They alleged that though they had welcomed deregulation of sand supply, they had been hit hard as it had gone into the hands of sand mafia. The city needs about 300 truck loads of sand per day and the city and its neighbourhood do not have any river beds for using sand for construction.
“The development of the city as smart city will be adversely affected if the government does not take action in brining the sand mafia to book. Now the sand mafia is fixing the price of sand though the government decision to supply it free of cost sometime ago was hailed by everyone in the construction sector,” Mr. Ramakrishna Rao said.
“A number of hurdles and lack of clarity in various issues in the implementation of free sand supply policy has led to acute shortage of sand availability. CREDAI-Vizag is constrained to state that the burning problem of sand is back to square one due to poor implementation,” he said.
CREDAI-Vizag vice president P. Koteswara Rao and honorary secretary B. Srinivasa Rao were present.
