GUWAHATI:
People planning to buy flats in Guwahati will have to shell out more money from April 20 as the Assam Real Estate and Infrastructure Developers Association (AREIDA) on March 4 announced to increase the rates of flats by Rs 600 per sq ft from the said date.
It was informed that the prices have been increased to cover the cost of construction.
Addressing media persons at Guwahati Press Club on April 4, AREIDA president PK Sharma said, “The revenue generated from the projects would not cover even the cost of construction given the fact that the prices on actuals (construction materials) have risen by Rs 600 per sq ft since 2020. The costs of key raw materials such as steel and cement used in construction have gone up with vendors citing global supply chain disruptions due to the war in Ukraine.”
Informing that the developers have taken the step as a drastic measure to survive, Sarma said that rapid rise in costs have eaten into the thin margins of realty projects and rendered them unviable. Affordable housing in particular is now impossible.
He said that after the Covid-19 pandemic, and the current increase in cost, the real estate industry is facing dual blow as they are finding it impossible to deliver projects within the projected timelines and costs
“For steel particularly, the situation is so bad that suppliers are not willing to take orders even at elevated prices. All construction work whether Prime Minister’s Awas Yojona or infrastructure projects of the government are severely impacted,” Sharma said.
He further said that prices of steel, cement and other construction materials have been rising steadily over the last two and a half years. These have now skyrocketed at a level, beyond the affordability of all developers.
Sharma went on to say that they are applying to RERA authorities for an extension of six months in the project completion period as projects across the state have been disrupted due to this abnormal increase in costs, as well as the inclusion of an escalation clause in the builder-buyer agreement where escalation based on actual figures must be factored in.