With material costs going up by 35 per cent and wages doubling in the past three years, besides the growing challenge of finding labour to execute projects, real estate prices are in for an increase, according to Mr Lalit Kumar Jain, President, Confederation of Real Estate Developers' Association of India.
“However, the price hike could vary from city to city and will depend on other factors such as supply of land. This means, metros such as New Delhi and Mumbai, where there is shortage of land, may show different patterns and have higher prices compared with a city like Hyderabad, where there is good supply,” he said.
Addressing a press conference at a realtors' convention here on Saturday, Mr Jain said that the Government needs to address the issue of approval costs, which is estimated to be about 40 per cent. This could be significantly brought down by cutting short the time for approvals through single window. Taxes account for about 30-36 per cent of the total cost.
Referring to the labour aspect, he said that the MNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) needs to be better designed to ensure that the labour is employed more efficiently.
He said “CREDAI is not opposed to the Real Estate Development Regulatory Authority. But the issue is to first address real estate sector concerns through a holistic approach rather than tackling them by taking up one issue at a time.”
“There is growing migration of people to urban areas. It is estimated that we would have to create living space for about 60 million people over the next decade. We would be able to address this only if the Government provides conducive environment to develop affordable houses,” he said.