Real Estate: Due to increase in the price of cement, demand for cheap houses may decrease, infra projects will also be affected.
The increase in cement prices across the country may hinder the construction of affordable houses. Additionally, customers may have to pay higher prices to purchase residential properties. This is likely to affect the sale of houses.
Officials associated with the real estate industry say that there is already a slow pace in the construction of affordable houses. Now, the rise in cement prices may impact purchases by retail customers, large-scale construction projects and infrastructure projects. Its impact will be visible on the real estate industry in the coming times.
Cement prices have increased by Rs 10-15 per bag in North India, Rs 30-40 in Central India and Rs 20 per bag in Western India last week.
According to the industry, cement prices had declined in the last five months due to weak demand. National Real Estate Development Council (NAREDCO) Chairman Niranjan Hiranandani said, the demand for affordable houses is already weak. Due to increase in the price of cement, it will become out of reach of the people. Other costs will also increase.
Builder can re-evaluate the budget
The rise in cement prices may require builders to reevaluate their budgets as the price rise impacts construction costs by Rs 4 to 5. In such a situation, they can add it to the potential price of their project.
India is the second largest producer of cement in the world.
India is the second largest producer of cement in the world. Its share in global installed capacity is more than 8 percent. According to CRISIL Ratings, the domestic cement industry has added 80 million tonnes of cement capacity in 2023-24 due to spending on housing and infra activities. This is the highest in the last 10 years. Cement consumption may reach 45 crore tonnes by financial year 2027.
In the January-March quarter this year, house sales in the country increased by 68 percent in terms of value to about Rs 1.11 lakh crore. In the same period last year, houses worth Rs 66,155 crore were sold. According to PropTiger, there was a growth in major cities in terms of both quantity and value in January-March.
