Why control the construction sector alone?

TBF PRESIDENT PRABHAKAR RAO ON 111 GO

Questions Telangana Builders Federation
President CH Prabhakar Rao

Cement companies can increase the price whenever they want. So is the case with steel companies and other construction material manufacturers and suppliers. And no one would neither questions them nor tries to stop them from hiking the prices. But all efforts will be made to regulate the developers who bring around 250 such products/components to build houses.

To what extent is it justified? If all the raw material manufacturing/supplying companies can be regulated especially with regards to prices, the construction cost will be reduced automatically and the flats will be available at affordable prices. Instead how is it reasonable to regulate the construction companies, by ignoring the factors which caused the price rise. In an exclusive interview with Real Estate Guru (REG), Telangana Builders Federation president CH Prabhakar Rao shared his views on the prevailing market conditions, decline in sales, rising construction costs and many more. Excerpts from his interview.

“There is no recession yet. Neither there are severe job losses nor a financial crisis. The pandemic too is less disruptive now. But the construction industry is still facing challenges. The realty business cannot get affected without any of these factors. Though there is some uncertainity in the Hyderabad’s real estate sector, it is impossible to reduce prices due to rising construction costs. The unsold units inventory is rising due to the UDS and prelaunch sales, following which many people are hesitating to purchase flats for a higher rate and are willing to take the risk and wait for a few years to own their dream home for a cheaper price.

Meanwhile, due to repeal of GO 111, there are rumours that the land prices will fall which is far from truth. There are reports that the sales have reduced significantly, in one part or the other of Hyderabad. There is a sizeable increase in inquiries from buyers, but the sales are not upto expectations. However, there is no question of selling the flats for reduced prices. The property prices would only go up due to rising construction costs. And this is the right moment for anyone to purchase their dream homes.

Interestingly, when the prices of cement and steel increase, the government negotiates with them. As a result, the companies reduce prices for government projects, but not for the construction sector. Majority of these organisations along with the State government feel that they are putting the burden on the builders, without realising that ultimately the burden has to be borne by the buyers. So, just like it has been trying to regulate the construction sector, the State government should also regulate the companies like cement and steel and others from rising prices.”