A home for oneself is a dream of many. Over the past decade, with greater opportunities available for improved living conditions & employment, attractive home loan schemes & plans, etc, the majority of the population have shown a keen and active interest in owning a home for themselves.
For the past 6 to 7 years, real estate prices had remained stagnant due to various socio-economic reasons. This had allowed for a boom in the sector of affordable housing, paving way for the advent of many property developers focused on the middle-class section of the society. Even with a moderate-income people could realize their dream of a beautiful home.
Now with higher demand-driven low mortgage rates, active hiring in IT/ ITeS sectors, rising input costs, etc, the market and price situation is changing. As per industry predictions, real estate prices are expected to rise 1.3 – 1.4 x from current prices in the period of the next 4 to 5 years. Such an increase could have a great impact on the availability and pricing of ‘affordable housing’ hampering the dreams of many.
Let’s have a greater understanding as to why such an increase is predicted in the housing sector of the industry.
Increasing Construction Cost – The Main Reason
As per CREDAI (Confederation of Real Estate Developers’ Association of India), residential property prices are expected to increase by 10 to 15%. The pandemic situation and the increase in fuel prices have been major contributing factors for driving up real estate prices. Since January 2020, the raw materials prices of the construction industry have witnessed a steady rise owing to a consistent rise in fuel prices.
It’s not just raw materials like steel and cement that are suffering the price hike but also other materials like tiles, aluminum, copper, etc. Even though the rise in raw material prices had begun in 5 to 6 years, property prices had remained fairly stagnant. But with no stabilization or decreasing trends visible, property developers are unable to bear the escalating costs and find no other option than to pass on the financial burden to the home buyers.
The industry is also facing higher input costs for labor. High labor and material costs have not just affected the profit margin of the developers but also the viability of the projects. Such a scenario is pushing developers towards hiking the housing prices by at least 10%. Also with the overhang of ready-to-move-in housing sticks dropping, the price hikes are set to be even more alarming.
With margins shrinking drastically for the developers, the new project launches and also the previously launched projects of the developers will witness increased prices. The material costs increase has also greatly affected the awarding of trade packages like Plumbing, etc, significantly affecting the delivery timeline of the projects.
Supply chain disruptions and RERA’s (Real Estate Regulatory Authority) regulatory decisions that limit the ability to increase the selling price have all added to the problems faced by developers. In the last 18 months, there was a 10 to 15 percentage increase in construction costs owing to construction delays caused by lockdowns and labor scarcity.
CREDAI has been urging the government and the concerned authorities to address the issue fairly. Without proper and timely actions taken in this regard, property rises will shoot up across all segments greatly affecting the aspirations of many who dream of a comfortable home at affordable budgets.
OMG Properties’ Affordable Houses
Considering the present scenario and with a desire to make the dreams of affordable homes a reality, OMG Properties has the best offers for its clients. The on- sale projects of OMG Properties are :
Project Location: Palakkad, Kerala
Project price: Starting from 3,840,000 INR
Vastu compliant, premium collection of 6 elegant 3 BHK villas located at a prominent location just 2 mins away from Govt. Polytechnic College in Palakkad.
Project Location: Angamaly, Kerala
Project price: Starting from 4,440,000 INR
Beautifully designed 3BHK villa community at prime location at Angamaly with great connectivity and access to prominent landmarks.
3. DAHLIA VILLAS –
Project Location: Angamaly, Kerala
Project price: Starting from 4,440,000 INR
Beautifully designed 3BHK villa community at prime location at Angamaly with great connectivity and access to prominent landmarks.
4. Mayflower Villas –
Project Location: Thrissur, Kerala
Project price: Starting from 4,490,000 INR
3 & 4 BHK luxury villas offering plush comfort and elegant living at one of the prime locations of Thrissur, away from the city’s hustle and bustle. The villa location is just minutes away from schools, Palakkad – Cochin National Highway, healthcare facilities, etc.
RERA Registration number: K-RERA-056-2021
Project Location: Palakkad, Kerala
Project price: Starting from 4,440,000 INR
A collection of 10 exquisitely designed 3 BHK villas. Gated community with luxury living standards at prime location with just 2 km distance from prominent landmarks.
