The real estate sector has been affected by the sharp rises in rate of construction interest and prices. The 12th five year plan aims at 8.1 % of GDP and this slowdown is likely to lower the GDP rate below 8%. Assocham in one of its surveys has submitted a report regarding the slowdown in the realty sector. It states that the main reason of the slowdown is unregulated means of rise in prices of construction material and also due to shortage of workforce. The construction industries at domestic level are having a hard time coping up with rise and fall in price of bricks, cements and steel rods combined with other useful input material. The prices have increased up to 30% since year 2009.
Real estate industry has also been facing major shortage in terms of skilled labour for the construction purpose. This shortage is estimated up to 40%. And the consequences of this shortage are cancellation of projects or most of them are getting delayed. According to a research, during the past two years there has been increase in cost of labour by 30%. The increase in prices is not only affecting the realty sector, it has built up pressure on daily commodities also like food, clothing etc. This inflation is mainly because of the rise in demand for commodities.
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