Real Estate Prices Will Only Go Up From Here, Says Sobha

New Delhi, April 08, 2018: Sobha Ltd. said it will not cut prices of its properties as the real estate developer looks to recover higher input costs. “We are not reducing the prices, and wherever there’s scope, we would take extra price to recover the increase in the input cost,” the company’s Vice Chairman and Managing Director JC Sharma told BloombergQuint in an interview.

The projects launched in the current fiscal year need to add the Goods and Service Tax in their construction cost and charge as per the revised rates of the tax regime. The GST Council in February approved lowering the tax rate on under-construction properties to 5 percent from 12 percent earlier while affordable housing projects attract 1 percent tax, without input tax credit.

According to the news reports published in bloombergquint.com by Aishwarya Tendolkar, the prices for the ongoing projects will only go up from here, Sharma said. “When you take the input cost and the increased GST as a part of construction cost to protect your margin, you will be left with no other alternative but to increase the price to where we are at currently.”

This, along with the rising price of cement—a key raw material for construction companies— will only add to the input cost, he said. “We have to put a price acceptable to customer as well as make sense from a reasonable margin point of view.” Sobha’s margin, he said, will only go up from where they were the news report further added.