Ahmedabad property prices to see more than one hike

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Property prices to go up by Rs. 400-500 per sq ft of 10-12% from the new fiscal, but Taral Shah, MD, Shivalik Projects says rising input costs mean there will be more hikes soon.

 

Ahmedabad: With prices of commodities and construction materials continuing to rise, property prices in Ahmedabad, which are set to increase by more than 10% from April, are likely to see more hikes in the coming months, according to a leading real estate developer.

 

Real estate developers are poised to hike prices by Rs. 400-500 per sq ft from the new financial year due to the unprecedented surge in prices of steel, cement, bricks, tiles, sanitary ware, electric wires, and other materials in the past few months. The decision to increase the prices across the board was announced by the Confederation of Real Estate Developers Associations of India (CREDAI) Gujarat, the apex association of the real estate sector in the state, a few days back.

 

“The impending hike of Rs. 400-500 per sq ft translates into roughly a 10-12% increase in property prices depending on the category and location. The hike has been necessitated by the continuing rise in commodity and raw material prices, but it isn’t enough to meet the increased costs. Developers will have to effect another similar price hike in a few months to pass on the rising costs,” said Taral Shah, Managing Director, Shivalik Projects, a leading real estate developer executing residential and commercial projects in Ahmedabad.

 

The real estate market was hit hard by the economic uncertainty caused by the Covid-19 pandemic. Property sales had come to a grinding halt, especially in the first wave of the pandemic, as people deferred plans to buy property. The real estate sector has, however, bounced back sharply with sales, especially in the residential segment, crossing the pre-pandemic levels. Sales were aided by record-low interest rates, a sharp uptick in economic activity in the second half of 2021, and a large share of household savings being directed into home purchases.

 

“The real estate sector is coming back on track after a challenging year, and given a choice, we would not have increased prices in an effort to support the recovery. But, input costs have gone up to unmanageable levels, leaving us with no option but to increase prices. The first round of hikes is just to give a breather to developers, and there will certainly be more hikes ahead if prices of steel, cement and other commodities do not fall,” said Mr. Shah.

TejGujarati