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Guntur real estate prices are soaring high due to raise in construction costs

GUNTUR REAL ESTATE PRICES AND CONSTRUCTION COSTS

Guntur real estate prices are soaring high due to raise in construction costs, The Hans India reported that constructing costs are increasing due to spike in prices of iron, cement, brick, hardware and labour charges in recent months. Consequently, middle class families are facing a challenging task of constructing a own house or purchasing a flat.

Now, the cost of a 2BHK flat on the outskirts of Vijayawada reached Rs 40 lakh and 3BHK is ranging between Rs 45 to Rs.55 lakh depending on the construction and location of the building.

IRON AND CEMENT PRICES ARE SOARING

Iron price has crossed INR 50,000 per tonne, with the increase of more than 20 per cent in the last one year. Cement prices are between INR 250 to INR 280 per a 50 kg bag depending on the brand. After a hue and cry raised by the builders and common people, the prices of cement are hovering between INR 250 to INR 280.

Cost of bricks has gone up from INR 4 to INR 7 per unit. Labour charges are also gradually increasing in recent months. Unskilled construction worker is demanding INR 300 to INR 400 per day and skilled worker between INR 700 to INR 900 depending on experience, skill and nature of work he does.

Impacted the realty business

All these factors have led to the rise of Guntur real estate prices and construction cost and also in the capital region of Vijayawada, Guntur, Amaravati and Tadepalli. National Real Estate Developers Council (NREDC) Andhra Pradesh Central Zone president Mr GSS Prasad said the builders are facing many problems due to rise of construction costs.

Mr Prasad said that thousands of completed flats and ready-to-occupy in Vijayawada, Guntur, Mangalagiri and Tadepalli remained unsold. He said it will take several years to sell these flats. After bifurcation of the state, many realtors have invested thousands of crores of rupees in construction of apartments, group houses and individual houses hoping rise in demand in the capital region.

LOCAL TAXES

According to estimates, the taxes paid to the State government and local bodies are amounted to 35 per cent of the total expenditure by apartment builders. The realtors have to pay 0.5 per cent Vacant Land Tax on the land value before construction of the building. The builder has to pay again VLT of 0.5 per cent to the local body during the tenure of construction.

As per the government norms, site where construction is not completed is considered vacant. Suppose a builder takes three year to complete the project, he has to pay VLT of 0.5 per cent on the cost of the site from the date of construction to the date of completion, said GSS Prasad, president, central zone of NREDC, Andhra Pradesh.

Source : The Hans India

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