Realty developers have also requested the Maharashtra Real Estate Regulatory Authority to extend the deadline for completion of ongoing projects by at least 6 months so that they get time to pause construction activity until prices rationalize.

“The prices of steel, cement and other construction materials have been rising steadily over the last 2 years. These have now skyrocketed at a level, beyond the affordability of many developers, especially in tier II and III 3 cities. 61 city association members who form a part of CREDAI Maharashtra have been left with no option but to temporarily stop purchases and shut down the construction activities,” said Sunil Furde, President CREDAI Maharashtra which has over 3,000 developer members.
While some rise in input prices in the last few weeks can be attributed to the Russia-Ukraine war, over 60 city chapters that form a part of CREDAI Maharashtra have urged the administration and government agencies to verify whether the rise in the cost of construction materials over the last few months is natural or due to cartelization, hoarding or profiteering.

According to him, the rates of key raw materials linked to construction including steel, cement, bricks, sand and wash sand, electric wires, fittings, tiles, pipes, sanitary ware, fabrication, sand, secondary minerals among others, have increased by roughly 40 to 45%.

The impact of this on input costs is about Rs 400-600 Rs per sq ft area and is expected to hit homebuyers, especially in the mid and affordable housing segment, he said.

CREDAI Maharashtra through its various city associations has already made several representations to Deputy Chief Minister and Finance Minister Ajit Pawar and Revenue Minister Balasaheb Thorat on various subjects requesting the government’s intervention during the pandemic.

The real estate industry has been resilient during the pandemic-induced tough times and has been able to manage till date, thanks to stamp duty relaxations, the lowest home loan interest rates and offers by developers.

The industry, which is the second-largest employer, is going through a recovery stage, will not be able to absorb this uncontrollable price rise and many projects will be delayed or halted in the absence of government intervention and this will directly affect the consumers at large, the industry body said.

Currently, around 10,000 construction sites across Maharashtra are employing approximately 1 million workers directly or indirectly working in the construction and real estate industry. Any such closure of works will affect them directly and also could result in a minimum delay of six months.