Kakinada: Rising cost of material worries house builders

KAKINADA: Real estate agents and developers and builders urge the state and Central government to take immediate steps and bring down the construction cost which has risen abnormally over the past few years.

The ever-increasing cost of cement, iron, and other construction material beside soaring labour cost have put construction activity beyond reach of the middle classes even if they have the land. Many are unable to construct houses. Labour cost which used to be 25 per cent of the construction cost in the past, now seems to be as much as cost of other construction material.

Many property owners have to strive in order to get a house constructed because the cost of material like iron, cement and sand frequently is hiked resulting in the stoppage of the work midway. The state government has not taken a decision on introducing new sand policy though all sand reaches in the state have been closed.

The construction activity has been hit during the summer which is seen as favourable for construction works due to the conditions.

There were several disputes between property owners and builders over the execution of agreement between them relating to construction activity. "The state government should announce sand policy immediately and take steps to make sand available for construction activity. Once it starts raining during the season, the conditions would no longer be favourable for the activity with almost all sand reaches getting inundated," said the Confederation of Real Estate and Developers Association of India (CREDAI) state vice president Garapati Rayudu. He said that registration charges should be reduced to protect construction sector. He also said that the Central government should reduce GST for the first-time registrations of buildings or apartments from 5 per cent to 1 per cent. A burden of Rs 200 to Rs 250 per sft falls on builders that should be reduced, he urged.

Eminent builder and civil engineering expert Gatti Satyanarayana, former GUDA member, said that the Central government should take steps to regulate the prices of construction material like iron, cement and others. He suggested the linking of construction activity with agriculture activity and welfare schemes like NREGS would help reduce the cost of production. Otherwise, it may affect several sectors and the activity may see a downfall that could lead to losses for the state exchequer in future. He said that middle class people are adversely affected and exploited due to increasing of construction cost. The Central and state governments should take immediate steps to rectify it in the interest of future generations.