Real estate sector beginning to feel the impact of Gulf war
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The Indian real estate sector is beginning to feel the impact of US-Israel and Iran conflict in the Gulf region with key raw materials becoming costlier or scarce, says Parveen Jain, president, National Real Estate Development Council (NAREDCO).
“The ceramic units in Gujarat and other States have closed down due to fuel unavailability. It will definitely have an impact on the construction industry. Similarly, costs of several other things are going up. There is change in steel prices, and all PVC items, wire, pipes etc., are becoming costlier. Pricing pressure is there on glass items. If the war prolongs, it is going to have a major impact on the industry," Jain said.
In an interaction with Fortune India, he said the real estate sector was expecting to benefit from a friendly Union Budget which prioritised affordable housing and tier II, III cities development, when the war started slowing down things.
Jain also highlighted escalation of land cost as another impediment in faster rollout of affordable housing projects. “In metro cities, land prices have gone up sharply in the last 3-4 years. Properties, apartments, have all become costlier. Buyers will hesitate if they find a significant price difference in a short period but the reality is that land, material costs have all gone up”, he said.
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Jain acknowledged that the government has done a lot of work in the area of affordable housing in the last couple of years. There is demand, but land cost is what is slowing down its growth, he added.
“We are also having discussions with the government to change the policy to take care of the land cost. Either government can provide land or develop affordable housing projects in PPP mode”.
Jain also pointed out that the Real Estate (Regulation and Development) Act, 2016 (RERA) has cleaned up the sector to a large extent and has increased transparency in the industry and built confidence among serious buyers.
NAREDCO is an apex Indian real estate industry body established under the Ministry of Housing and Urban Affairs. It acts as a legitimate platform for the government, real estate industry, and the general public to address their concerns and find effective solutions to the challenges faced by the real estate sector.