AHMEDABAD: From July 1, homebuyers in Ahmedabad may face a price increase of 5-10% for under-construction properties. This decision comes in response to a rise in construction costs caused by supply disruptions linked to the West Asia conflict.
This decision was made during a meeting of approximately 400 developers organized by Credai Ahmedabad on Monday. The gathering aimed to evaluate the effects of rising raw material prices as the June price stabilization commitment by Credai approaches its end.
Rajesh Vaswani, chairman of Credai Ahmedabad, noted that construction material prices have surged dramatically since the onset of the conflict. “Some raw materials have seen price hikes of up to 80%. While developers initially absorbed these costs, an increase has now become necessary. Depending on the project stage, prices for under-construction properties will rise by 5-10% starting July 1,” Vaswani stated.
The developers’ association has also reached out to GujRERA, requesting a six-month extension on project completion timelines, citing the need to address escalating costs and sporadic availability of vital construction materials.
According to Credai Ahmedabad, essential materials such as cement, steel, tiles, aluminum, PVC pipes, paints, ready-mix concrete, cement blocks, and waterproofing products have seen significant price increases, with supply remaining unpredictable.
Ankur Desai, secretary of Credai Ahmedabad, mentioned the supply chain volatility has hindered developers from adhering to previous project budgets. “Key construction inputs have risen in cost by 30-80% since the conflict emerged. Suppliers are hesitant to commit to long-term agreements due to price uncertainty. Even with a swift resolution of the war, it may take six to nine months for the supply chain to stabilize,” Desai explained.
Industry insiders indicate that developers are also worried about the broader economic ramifications of the conflict, including inflationary effects and escalating fuel prices. Desai added that overall construction costs have risen by approximately 20-25%, but developers are currently unable to fully pass this increase onto clients.
Despite the price hike, Desai is optimistic about demand in Ahmedabad’s real estate sector due to ongoing infrastructure projects and growth prospects linked to the upcoming Commonwealth Games.
