AHMEDABAD: On June 15, real estate developers in Ahmedabad will convene to discuss potential price increases for under-construction properties due to rising construction costs caused by supply disruptions linked to the West Asia conflict.
The Confederation of Real Estate Developers’ Associations of India (CREDAI), Ahmedabad, has organized this meeting. Developers are expected to discuss both the likelihood of a price hike and the magnitude of any changes. Industry insiders indicate that ready-to-move-in and completed projects will likely remain unaffected, while those initiated within the last six months might see increases in the range of 5% to 7%.
As the deadline of CREDAI’s earlier commitment to maintain stable prices approaches at the end of June, developers are reassessing their pricing strategies, particularly for ongoing projects in the early to mid-construction phases.
CREDAI Ahmedabad has also requested a six-month extension for project deadlines from GujRERA, citing soaring raw material costs and sporadic shortages of crucial inputs. The organization has pointed out significant price hikes in essential materials for residential construction, including cement, steel, tiles, aluminum, PVC pipes, paints, ready-mix concrete, cement blocks, and waterproofing materials.
According to CREDAI, since the onset of the conflict, suppliers have sharply increased rates, with certain inputs seeing price rises of 30% to 60%, all while availability remains inconsistent. Developers report that this dual impact is straining project budgets and complicating the maintenance of earlier financial projections.
Rajesh Vaswani, chairman of CREDAI Ahmedabad, stated that the meeting aims to achieve a unified position among the developers. “Around 300 developers from the city will participate,” he noted. “We will evaluate the potential for a rate increase and strive to reach a collective agreement. Different projects are differently affected by the rising costs of raw materials, and we will review all relevant issues.”
A prominent developer mentioned that internal discussions are already taking place within the industry. “Projects that are completed will not experience any price increases as they are not affected by current raw material costs. However, those launched in the past six months are facing significant impacts,” the developer explained.
Additionally, CREDAI is anticipated to advocate for cohesion among developers to ensure fair competition should any price adjustments be enacted.
