Real estate sector strained over raw material prices
NASHIK: The pandemic has affected all the sectors of the district, and real estate is no exception to that. From migrant workers returning to their hometowns to raw material prices shooting up, the sector has suffered immensely. Even though the district announced relaxations following a decrease in the number of Covid-19 cases, the sector’s business remains stagnant due to various reasons. To understand the impact of the second wave on the real estate business and learn about the future possibilities and growth, Deshdoot Times spoke to Ravi Mahajan, president, Credai Nashik Metro.
Raw Materials: To begin with, Mahajan stated that the prices of steel and cement have skyrocketed, thus increasing the construction cost. As the raw materials are getting expensive, the overall costing of the building/construction site gets affected. The price rise has resulted in an increased rate per square foot by Rs.300.
Adding up to the costing, the state government increased the rate of some specific metals used in construction, crushed sand and murum from July 1st. One of the reasons is an increase in the transportation cost due to increasing fuel prices. Consumers should expect a rise in property rates shortly as the new construction sites will cost comparatively more.
Impact of the second wave: The second wave impacted many lives severely. Almost every second family witnessed the wrath of the virus. As someone’s family member, colleague, or friend, was admitted to the hospital during the wave, residents are aware of the expensive bills. Many are saving money to be prepared for the third wave.
As most of the patients’ families had to pay Rs.1 lakh or more, residents are saving Rs.4 to 5 lakh for the future. However, one positive angle of the lockdown was that people realised the importance of homes and want a bigger home now. As everyone has been indoors for almost a year, they need more facilities and comfort in their houses. The market is expected to boom after the third wave, and builders will probably receive decent bookings.
Migrant Workers: Even though the migrants flocked to their hometowns in the first wave, not many rushed back in the second wave. As the government announced special trains for them amid the lockdown, the situation was better in the second wave. Those who flocked to their hometown also returned for work thus, not affecting the sector adversely. However, a rise in labour costing, payments, and daily wages has affected the sector and the costing.
Appeal to the government: To conclude, Mahajan stated that he expects the government to brush off the royalty imposed on the raw materials and stick to the old rates. Also, they should bring back the concessions on stamp duty to aid the sector. Mahajan has submitted a letter to the concerned officials and expects a positive reaction on the same.