Steep rise in the prices of construction materials cited as reason
Increase will be in the range between Rs. 75 and Rs. 500 per square foot
New prices to come into effect from June 10
BANGALORE: In the light of a steep rise in the prices of construction materials, including cement, steel and labour, the apartment developers in Bangalore have decided to increase the rate in the range between Rs. 75 and Rs. 500 per square foot, which translates to 3 to 8 per cent more than the existing prices.
The new prices will come into effect from June 10.
A decision in this regard was taken by the members of Karnataka Ownership Apartments Promoters’ Association (KOAPA), which has now been rechristened as Confederation of Real Estate Developer’s Associations of India (CREDAI), Karnataka.
Addressing presspersons here on Wednesday, CREDAI-Karnataka president Balakrishna Hegde said the rates would be increased depending on the increase in cost of construction, based on the stages of construction of various project.
“If we have to maintain our quality standards, it is just impossible to hold to the current levels, and that it can hurt the promoters very badly,” he added.
He, however, said that the association may review the situation in due course. Giving illustrations, Mr. Hedge said: “Steel price has increased by 56 per cent, cement by 24 per cent and labour cost has gone up by 35 per cent, while the interest on project loans has gone up by 20 per cent. There has been enormous delay in obtaining sanctions of plans mainly because of new requirements such as environmental clearances, which is taking between 12 and 18 months.”
All these factors have a cumulative impact between 20 and 30 per cent on the construction industry depending on the stage of construction, he added. Contrary to the reports that demand for apartments had come down in Bangalore, he said that Bangalore market had stabilised.
“The prices here were still cheaper when compared with that of Mumbai. While apartments are still available between Rs. 2,500 and Rs. 3,000 per sq ft. within 10 to 12 km from central business district, the prevailing prices in Mumbai was between Rs. 5,000 and Rs. 6,000 per sq ft in areas that were 35 km from South Mumbai,” he added.