Property prices are expected to increase as high as 15 % in the coming months mainly because of the escalating cost of construction material, said S. Sivagurunathan, president, Chennai chapter of the Confederation of Real Estate Developers’ Associations of India (Credai).
During an interaction of the recently elected office-bearers of Credai Chennai with the media here on Wednesday, he said that the builders, particularly those in Chennai, had largely avoided passing on the rising input cost to home buyers. However, it had become unviable, he said.
“In the next quarter itself, we may see increase of around 15%,” he said. He urged those considering to buy properties to do that sooner to avoid the increase in price. He said Credai had been continuously appealing to the government at the national level to take steps to bring down the escalating costs.
He said while the interest rates on housing loans were close to 8 % now, it may likely go up to 8.5 % in the near future if the Reserve Bank of India decides to increase the repo rate.
Viswajith Kumar, executive committee member, Credai Chennai, said the city had been witnessing good demand post pandemic in both residential and commercial real estate sector. Citing reports compiled by different organisations, including Credai Chennai, he said the absorption of new properties has exceeded the supply.
He said while new projects for the construction of 5,002 residential units were launched by Credai members in Chennai in 2022, 6,097 units were sold in the same period. He said the available unsold housing stock at present in the city was around 5,000 units.
He said the demand for commercial properties in Chennai region was good, particularly with many projects expected in the data centre, warehousing and industrial logistics sectors.
To a question on Goods and Services Tax (GST), P. Kruthivas, secretary, Credai Chennai, said the body had been making representations to the Union government to at least allow the builders to claim ‘input tax credit’ on the GST they paid for construction material.
Mr. Sivagurunathan said the State government had been providing full support for further development of the real estate sector. He thanked the government for introducing the single window system for building approval, which he said had been the demand of Credai for nearly two decades. Acknowledging that there were teething troubles in the new system, he said those were sorted out by the government. A Mohammed Ali, president-elect, and Abhishek Mehta, vice president, spoke.
