The Hindu Business Line : ‘Workers’ exodus, cost escalation may dent real estate biz in Pune’

Pune April 10 Mass exodus of labourers from the construction sites, increasing prices of steel and cement, increasing premiums to be paid to the Pune Municipal Corporation is all set to put a hole in the pockets of the buyers waiting to take possession of their homes.

Talking to presspersons, Mr Lalit Kumar Jain, President, Promoters and Builders Association of Pune pointed out that the increasing costs had escalated to such an extent that it was no longer possible for the real estate members to absorb the increase.

He noted that according to a study that had been submitted to the PBAP, it was found that it was necessary to increase the rate ranging from Rs 50 a sq ft to Rs 400 a sq. ft.

This increase is expected to come in place from April 20, he said while noting that this price increase would be for the residential apartments.

He said it had been become a necessity and that it would depend on each builder or developer the amount they would charge the customer.

Escalation

It may be noted that last year, there was no increase in prices.

The current price in the city in most locations range between Rs 2,500 and Rs 4,500 a sq ft while in some of the hotspots of the city it has even crossed the Rs 7,000-10,000 a sq ft rate. Mr Jain also pointed out that there was high resentment amongst the middle class due to general inflation as also lack of affordable housing in the city.

Housing loan

He noted that in 2003, the interest of housing loans hovered around 7-7.25 per cent while now it had increased to more than 10 per cent.

He pointed out that it had now become a necessity that affordable housing should be constructed in the city, which meant that the EMI (equated montly instalment) to be paid by the consumer should hover around less than Rs 4,000 per month. He said it was now becoming a necessity to create special housing zones so that the construction costs could be brought down by 40 per cent.

He said presentations had been made even to the Deputy Governor of the Reserve Bank of India on how affordable housing could be done in the country and that they were awaiting a response.

Mr Jain noted that Pune is among the fastest growing cities in the country and last year had generated employment close to 60,000 personnels in the IT segment in Pune.

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