Construction cost has gone up by 25 per cent since West Asia war began: NAREDCO President Parveen Jain

CHENNAI: The construction cost in the real estate sector has inflated by 25% since the West Asia war began in February, said NAREDCO president Parveen Jain.

Speaking with TNIE, Jain said, “The input cost of construction has been up by 25% as all raw material prices have increased in the last six months. Copper has seen a price increase of 60% in the past six months. Even if the US-Iran war stops, it will still take another three months for supplies to normalise.”

He also said that there is less possibility that residential prices would go up, as upward revisions in housing prices have already taken place.

“The revisions or changes in residential properties in the real estate sector have already been reflected in the current market value. New upward or downward revisions are not possible, at least for this year, because of the high land value. The value has increased by 10 times in five years,” Jain said.

He added that this year, his company Tulip Group, has seen slow demand compared to last year. He also said that most of the realtors in the country are bullish on India’s real estate growth.

“In India, there is always a shortage of supply compared with overall demand. There is a robust demand for residential properties, and we are short of supply. The real estate industry is bullish on India for the next 10-15 years. The concern is that this kind of short-term crisis, such as the West Asia war, is hindering the growth and making the overall outlook a bit uncertain. However, we have to deal with such crises if we want to grow.”

Jain also noted that several real estate bodies have urged the government to provide land at a subsidised rate or acquire land under a PPP model so that the developers could build affordable housing for people, as land serves as a major component of development costs.