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Rising commodity costs may lead to increase in property prices, project delays and compromised quality

The cost of various construction commodities has risen by at least 50 percent, while some items have become expensive by as much as 100 percent and more over the last couple of years.

Saransh Trehan

Newton’s third law states that for every action, there is an equal and opposite reaction. Likewise, rising retail prices and inflation have started affecting the real estate sector and are likely to cast a shadow on the long-awaited recovery that is still in a nascent stage.

There are apprehensions that rising prices of key inputs like cement, steel, electrical equipment and other construction material will increase the cost of residential as well as commercial real estate projects and delays. These costs will either have to be passed on to the buyers or borne by the developers themselves. It may even result in project delays and a compromise in quality.

The cost factor