Curation Team
Consumers across categories are awaiting the benefits of reduced goods and services tax (GST) rates from Monday, but homebuyers may have to wait to join the party.
Executives of real estate industry bodies said that there is no clarity yet on how much benefit would be passed on by cement manufacturers to consumers and that whenever cement prices are reduced, only the projects that are at an early stage of construction would benefit.
“We are yet to get clarity from cement manufacturers about how much benefit will be passed on to builders. We are expecting to see some impact in the first week of October, following which the builders can decide how much construction cost can be reduced,” said G Ram Reddy, president-elect, Confederation of Real Estate Developers’ Associations of India. “The projects where substantial use of cement is required will see reduction in cost, benefit of which can be passed on to the homebuyers.”
The government’s decision to lower tax rates on essential construction materials such as cement, marble and granite, following the GST Council’s recommendations, is poised to benefit the real estate sector, according to experts.
It is expected to reduce project costs for developers and homebuyers, potentially leading to increased affordability and accelerated project launches.
“We are hopeful that the cement industry will also pass on these benefits to the real estate sector so that the ultimate benefit reaches customers in the form of reduced housing costs,” said G Hari Babu, national president, National Real Estate Development Council (NAREDCO). “If the cement industry chooses not to pass on the benefit, the real estate sector may consider seeking legal opinion on the matter and, if required, request intervention from the government. Our objective is not confrontation, but to ensure that the benefits of GST reforms are fairly transmitted across the ecosystem and ultimately reach the end consumers.”
Construction costs are projected to reduce by about Rs 1,000 per square metre or 3-5%, according to industry executives, and possibly even up to 10% in some cases.
“This advantage can be directly passed on to customers, making homes and commercial projects more affordable. Such a move will build customer confidence and provide much-needed momentum to the sector,” said Hari Babu.
Once the cement industry passes on the benefit, it will directly reduce project costs, enabling developers to offer more competitive pricing. This will help deliver better value to customers, improve affordability and contribute positively to the growth of the entire real estate sector.
“In addition to cement, the benefit to the customers can also be passed on from the saving of air conditioning. A lot of developers give apartments by installing the AC and the cost saved on GST reduction can now be passed on to the buyer,” said Harsh Vardhan Bansal, president, NAREDCO Delhi.
