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  • Sunday, July, 2022| Today's Market | Current Time: 03:00:08
  • All real estate bodies join hands to register protest against the steep hike in raw material prices

    The NO WORKDAY announced by The Confederation of Real Estate Developers’ Associations of India (CREDAI) along with all its chapters in association with Telangana Real Estate Developers’ Association (TREDA), Telangana Builders Federation (TBF), and Telangana Developers Association (TDA) to protest against the unprecedented increase in the price of raw materials for construction was a grand success. More than 1000 developers in the city and about 800 members across the state participated in the No Workday. This impacted over 2,50,000 direct workforce, 50,000 to 60,000 indirect labor, and 25,000 to 30,000 technical staff involved in the various projects.

    The rise in raw material costs is acting as a negative catalyst that will cause an increase in home prices and impact the delivery to home buyers. If not controlled, the increase in prices of raw materials like steel, aluminum, copper, PVC pipes, etc. will severely hamper the real estate sector and lead to a hike in property prices and job losses if the developers are forced to stop construction work. The ‘No Work Day’ was organized to register the concern of the developer community on the steep and unjust increase in prices of raw materials and highlight the impact if prices are not controlled.

    Speaking on the occasion, Mr. RK Rao President of CREDAI Hyderabad said, “Hyderabad, being a vibrant city has a robust realty sector and while it is growing rapidly, the price increase in the material cost is increasing the burden on both the builders and the consumers. The present increase in costs for materials like is severely impacting the supply chains and the cash flows for the developers and sending the cost projections in disarray. Today the ‘No Work Day’ to register the protest against steep price hike received a tremendous response from the builder’s community. We hope this will trigger the desired response from all suppliers of raw materials, to rein in the prices and ensure the construction works can be carried out without disruption.”

    Adding to this, Mr. V. Rajashekar Reddy, General Secretary, CREDAI Hyderabad said, “We would once again like to highlight that the real estate sector is one of the largest contributors to the GDP for the state and the country and the 2nd largest employment provider. To register our protest all members of CREDAI Hyderabad participated in the ‘No Work Day’ today. If the raw material providers form cartels and raise input costs unjustifiably, the builders will be forced to increase prices to absorb nominal increases, but steep hikes will require stopping work, leading to job losses. All industries are facing difficulties as we are recovering from the pandemic and the challenges posed by war, however raw material suppliers should not use this as an excuse to raise prices enormously, as is the present case. We urge the government to intervene and help rein in the steep price hike, so that the end users and day-to-day workers do not suffer.”

    Adding to this Mr. Ch. Ramchandra Reddy, Chairman, CREDAI Telangana, said, “Our construction industry is different from other industries. Project completions can take anywhere between 1 year to 4 years depending on the size of the projects. We decide the % sharing with landowners in joint venture projects during the DAGPA time based on our cost estimates for the upcoming construction period. If the cost of raw materials varies wildly from 15% to 100% the overall cost increases exponentially and the builders are in trouble. In these uncertain times some builders are forced to pause construction work at the projects, hoping to restart after the commodity prices come down. The real estate sector is the 2nd largest employer and a major contributor to the GDP, if the projects are deferred then it will directly impact the livelihood of those depending on the sector and hamper the growth of the economy. We urge the government to allow the input tax credit for real estate projects and rationalize the GST on various construction materials from the current rates.”

    Adding to this Mr. D. Murali Krishna Reddy, President, CREDAI Telangana, “All  members from CREDAI Telangana chapters participated in the ‘No Work Day’ today. It received an overwhelming response. This goes on to show the concern in the industry due to the steep hike in raw material costs. The state government can consider reverting to the old regime of stamp duties on the projects to boost the market sentiments in these trying times. Interim relief in this regard will be a great help to tide over the present challenge.”

    Speaking on the occasion, Mr. Sunil Chandra Reddy, President, TREDA, “All members of TREDA participated in the ‘No workday’ today. Due to the pandemic, the real estate sector is grappling with various problems. An increase in input costs, and shrinking margins, have only added to the woes of developers and hit the sector hard. The developers are left with no option but to increase the cost of the ongoing projects and the unsold inventory to disperse the impact of the rising prices. We also request the government to intervene by helping rationalize the present price hike and form regulatory bodies to prevent future cartelization by raw material manufacturers like cement and steel.”

    Adding to this, Mr. C Prabhakar Rao, President, Telangana Builders Federation said, “The real estate sector which has seen a huge downfall because of the Pandemic and the War situation, the market prices have really gone up due to the increase in the prices of the materials used like steel, cement, PVC, resins, etc. The global environment has been a dampener for prospective customers. We urge the Government both in the state and the centre to provide relief to the developers through GST and input credits and reduce stamp duties to boost customer sentiment. The No work day today saw a participation of all members from TBF.”

    Speaking on the occasion, Mr. G V Rao, President, Telangana Developers Association, said, “ All members of TDF participated in the ‘No Work Day’ today. When the input costs increase across the board, then we have little leeway to absorb the same. Today we have registered our concerns regarding the precarious situation builders are in due to the steep hike in prices. We urge raw material suppliers to take note, and appropriately rationalize and justify price increases. We also urge the government to institutionalize a mechanism to regulate prices in the critical sector like steel and cement to help business continuity.”

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