How to Control Real Estate Prices in a Regime of Rising Civil Construction Cost
Third-largest sector to bring about economic growth, the real estate industry in India is expected to continue its upward trajectory in 2022. It is expected that Indian real estate sector will reach a market size of $1 trillion by 2030 and will account for 13 per cent of India’s GDP by 2025.A number of initiatives have been undertaken by the Government of India with the hope of incentivizing real estate purchases. Current trend in real estate construction cost Real estate companies are regaining their pricing power as the stock of unsold houses trends down and building costs, mainly steel and cement, keep climbing. The industry has been petitioning GoI to regulate prices, reduce taxes and allow easier imports of chief construction materials. Now, the leading developers have begun to pass the added costs on to buyers, in some cases by up to 10% of the price of a house, and they are not reporting any adverse effect on sales. The surge in oil prices, once GoI permits its pass-through to...