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Property prices in Tamil Nadu are likely to increase by 10 per cent in the coming months due to a rise in raw material cost and lack of supply.
Addressing media persons here on Wednesday, Suresh Krishn, President of the Chennai chapter of the Confederation of Real Estate Developers Associations of India (CREDAI), said the cost of raw materials such as sand, cement and steel have sky-rocketed in the last six months. The cost of sand has increased 75 per cent from ₹35 per cubic feet to ₹135; cement has gone up from ₹270 a bag to ₹330 and steel has increased to ₹47,000 per tonne from ₹34,000. “All these have resulted in overall increase of ₹400 a sq ft in construction cost,” Krishn said.
In the last two years the land cost had stabilised and properties did not see any price raise. The past year did not see many new launches due to policy changes such as GST and RERA and poor market sentiment. However, there is a decline in unsold inventory. “Now there is a need for more supply in the market,” Krishn said.
With GST, the input cost has risen by 5-6 per cent. All these have resulted in thin margins for developers and hence an increase in property price will be inevitable, Krishn added.
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