The real estate developer community, upset over the recent cement price hike, is planning to stall construction work in southern states for some time. This would result in the cement prices coming down as stocks would pile up.
However, a decision on this will be taken after discussions with multiple stakeholders in the construction segment, according an industry representative.
Cement prices in the recent few days have gone up sharply triggering resentment among developers. For instance, in Andhra Pradesh and Telangana, the prices are now about Rs 280 to Rs 285 compared to Rs 215 to Rs 225 a bag a few days ago.
“From the developers’ side, we are having discussions in the southern states on ways to deal with the big hike in the cement prices. The industry is not in a position to either absorb the hike or pass it to the customers. We are asking the cement industry to reconsider their decision on the pricing,” said C Shekar Reddy, national president, Confederation of Real Estate Developers' Associations of India (CREDAI).
According to him, the impact of the increased cement prices will be to the tune of Rs 60 to 100 per sqft implying an increase of Rs 60,000 to Rs 1,00,000 on units sized around 1,000 sqft. This will have a cascading effect on the finances of the buyers, he said.
“Stopping construction work for some time is an option we have. However, the impact will be on the work force as they will lose wages. Realigning the workforce will be difficult as many would be dislocated. In other words, if the work is stopped for two weeks, getting back to the work schedule may take up to four weeks. Also, about 200 ancillary industries are dependent on the construction segment and their work would also be affected,” said Reddy adding that the developer community was hoping that cement prices come down once rains lash.
However, a decision on this will be taken after discussions with multiple stakeholders in the construction segment, according an industry representative.
Cement prices in the recent few days have gone up sharply triggering resentment among developers. For instance, in Andhra Pradesh and Telangana, the prices are now about Rs 280 to Rs 285 compared to Rs 215 to Rs 225 a bag a few days ago.
“From the developers’ side, we are having discussions in the southern states on ways to deal with the big hike in the cement prices. The industry is not in a position to either absorb the hike or pass it to the customers. We are asking the cement industry to reconsider their decision on the pricing,” said C Shekar Reddy, national president, Confederation of Real Estate Developers' Associations of India (CREDAI).
According to him, the impact of the increased cement prices will be to the tune of Rs 60 to 100 per sqft implying an increase of Rs 60,000 to Rs 1,00,000 on units sized around 1,000 sqft. This will have a cascading effect on the finances of the buyers, he said.
“Stopping construction work for some time is an option we have. However, the impact will be on the work force as they will lose wages. Realigning the workforce will be difficult as many would be dislocated. In other words, if the work is stopped for two weeks, getting back to the work schedule may take up to four weeks. Also, about 200 ancillary industries are dependent on the construction segment and their work would also be affected,” said Reddy adding that the developer community was hoping that cement prices come down once rains lash.
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