As the Government and industry engage in a tug of war, the former pushing for a cut in prices to control inflation and the latter complaining of inability to bring down prices, either because of rising input costs or market demand, the consumer — who bears all the costs — can hope for little relief.

Even as the Government threatens administrative measures on cement and steel manufacturers, the issue is of little more than academic interest to the home-buyer who has nothing to look forward to — buying a house is not going to get any cheaper in the near future.

Whatever price reduction is envisaged on construction materials will have little impact on the end prices for people hoping to own a house, particularly if they are on a budget.

Assuming that the prices of steel and cement are brought down, developers say, it will not contribute to bringing down costs for the end-buyer because the reduction will only roll back prices to the February-March levels — less than Rs 5,000 reduction on a tonne in the case of steel and a few rupees on a bag of cement.

Developers argue that they have not increased prices in recent times. What they do not acknowledge is that the margins that they had carved for themselves in the earlier years have allowed them to provide for these increasing costs.

But those arguments apart, as of now, even the reduction that the steel and cement manufacturers have committed to make to the Government is yet to be reflected in the market. Construction steel continues to range around Rs 50,000 a tonne, including taxes, and cement costs about Rs 250 for every 50 kg bag. The industry says it can do little to control the situation.

Everybody has a reason to justify the rising costs. Also, they absolve themselves of responsibility for rising costs, individually — steel only contributes to a fifth of the construction cost, cement is less than 10 per cent and compared to the selling cost of a square foot of developed space, just a fraction…

Developers blame everything — spiralling cost of land, cement, steel, sand, blue metal and labour, which are driving up construction costs and cutting into their margins. Steel manufacturers blame demand and supply, cement manufacturers blame rising input costs – of coal, power, limestone, gypsum and fuel – and hold the market responsible for the increasing prices.

But at the end, all the costs land cumulatively on the final buyers for whom making an investment in property is nearly impossible. The cost of buying a house in any of the cities is beyond the capacity of the average wage earner.

Their inability is reflected in the market situation as housing sales drop for the developers across all markets. A situation that is not being addressed and little chance that it ever will be.

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