Property India : Who makes affordable houses unaffordable? -Real Estate India

For the past five years, the government’s
exhortations on providing affordable homes for the not-so-affluent classes have become
shriller than ever before. True, politicians have always talked about roti, kapda aur makaan(food, clothing and shelter), but lately the focus has shifted to ‘affordability’.
The implication is, obviously, that most homes being sold in the markets are no longer affordable.

Why should homes not be affordable? Who is to blame for the rise in home prices? Some would like us to believe that cement producers are the ones to be blamed because this commodity has seen a spurt in prices. But cement accounts for just around 10% of construction costs (excluding the cost of land).Steel accounts for a higher 15%. Yet nobody looks at the speculative profits steel traders make.

Moreover, unlike steel, cement companies have proved that they can compete very effectively against imports. This is possible only when the quality is good, and the prices competitive.

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Who makes affordable houses unaffordable? - India - DNA