Mr Sushil Mantri, Chairman and Managing Director, Mantri Developers, and President CREDAI Karnataka, says, the year 2011 started with a lot of promise for the realty sector, which witnessed the launch of many promising projects. But the latter part of the year as well as saw a slowdown in the market, due to frequent increases in the cost of cement, steel, iron, sand etc. Construction cost went up by almost 30 per cent, contributed by a 50 per cent increase in labour costs, and 20 per cent increase in material costs cement prices went up by 30 per cent, steel prices were up 10 per cent, and some other materials were up 20-30 per cent, say developers.
Mr Mantri adds that the rate hike by RBI to curb inflation has as well as deterred the growth of the sector to an extent. Though banks did pass on the additional burden of the rate hike to customers initially, the last three hikes did not witness any rate transmission to customers. In fact, banks now want to keep their lending rates attract enough to keep their home loan portfolio growing.Ready to move in flats in BangaloreReady to move in flats
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