Houses to cost more as prices of cement, steel rise steeply

Vijayawada: Construction activity will be badly affected in the capital region of Amaravati and other parts of State with the gradual increase in the prices of cement, steel and hardware materials.

• The cost of a 50-kg bag of cement increased by Rs 20 to Rs 30
• Steel prices go up by Rs 10,000 per tonne
• Cost of lifts and hardware also increase under the GST regime
• Builders to form a Joint Action Committee to fight against the spiralling prices of cement

Cement prices increased by Rs 20 to Rs 30 per 50-kg bag in the last two months. Almost all brands have hiked the prices badly hitting the construction industry which is providing livelihood to lakhs of workers in the State.

More than 5,000 tonnes of cement is purchased every month for construction purposes in the capital region of Amaravati which comprises Vijayawada, Guntur, Mangalagiri, Tadepalli and villages along the national highway between Vijayawada and Guntur cities.

The price of 50-kg cement bag was between Rs 230 and Rs 250 two months ago. The price depends on the brand value of the company. Now, the prices increased to Rs 260 to Rs 290 per each bag during the last two months. The builders are alleging that the cement companies’ syndicate is behind the rising prices of cement.

GSS Prasad, president of the central zone of National Real Estate Developers Council (NAREDCO), which is one of the national level real estate associations, said there is no specific reason for the rise in the price of cement. The central zone of NAREDCO consists of four districts Krishna, Guntur, East and West Godavari districts.

Prasad said the cement prices would further escalate in the summer due to rise of construction activity in April and May. He said the real estate associations would form Joint Action Committee (JAC) to fight for reduction of cement price in the state.

He said the real estate sector is one of the important sources of livelihood to thousands of construction workers in the State. He felt the sector would face crisis in near future with increasing prices of steel also. Steel prices increased by Rs 10,000 per tonne during the last three months. The price of a tonne of steel increased from Rs 35,000 to Rs 45,000 in the last three months.

Besides, the prices of lifts and hardware materials also increased due to impact of GST. Lift prices increased by Rs 1 lakh during the last one year. All these factors will become a huge burden to the consumers. Initially, the builders have to suffer as they have to invest crores of rupees. Ultimately, the buyers will bear the burden of the cost of construction.

Ch Sudhakar, general Secretary of Confederation of Real Estate Developers Association (CREDAI), Andhra Pradesh chapter, said the builders faced a challenging task of selling thousands of flats built in the capital region of Amaravati during the last four years.

He said the real estate market crippled in the State due to the impact of demonetisation of high value notes by the Union government in November 2016 and never recovered since then.

He recalled the builders associations conducted series of meetings and even met Chief Minister N Chandrababu Naidu last year as part of their struggle to bring down the cement prices. He said similar fight should be launched again to check the spiralling cement prices.

With the hike in cement prices, the cost of construction increased by Rs 50 per every square metre in the last two months. If the cement price increases further, the investors have to spend heavily. Finally, the consumers have to face the burden.

Middle class people are already finding it difficult to purchase double bedroom flats which are sold at a price of Rs 35 lakh to Rs 42 lakh in the cities of Vijayawada and Guntur. Now, with the escalating prices of cement, steel and hardware, the price of apartments or individual houses would increase further.

By Md Ameen