Abhishek Jain, COO, Satellite Developers, looks at the repercussions of the rising costs of cement on construction projects and the effective means through which developers can work around it.

How has the rise in cement and building materials cost impacted your business?
We understand that most of our projects are close to completion and therefore, there will be minimal impact. However, for under construction projects, the rising costs of cement and building materials will have a significant impact. We are proactively planning and managing these costs to mitigate the impacts and provide customers with competitive prices and quality products and services.

As the costs are expected to remain volatile for a few more months, is there any change in your strategy or approach towards the launch of new projects?
We have taken several measures to address the volatility of cement and building materials costs. We have tried to lock the prices with our vendors in certain cases. We are also closely monitoring prices and adjusting our strategies accordingly throughout the launch of new projects. We are focusing on cost-effective solutions while still delivering high quality end products. Additionally, we are exploring alternate sources of materials to reduce our reliance on conventional materials.

Tell us about the impact on timely delivery of developer projects.
The rising costs of cement and building materials have had an impact on the timely delivery of developer projects. This is true for other developers as well. We are working to ensure that the increased operational costs do not affect the quality of services we provide. We are actively managing our resources and focusing on cost-effective solutions to ensure timely delivery of projects while still maintaining a high level of quality.

How has the consumer behaviour changed with change in property costs? Do you expect the demand to decrease?
We have seen a shift in consumer behaviour due to the increase in property costs. Consumers are more conscious of their budgets and are seeking value for money when investing in properties. Although the demand for properties may decrease in the short term, we believe that if developers can offer quality products at competitive prices, there will be an increase in the demand for properties in the long term.

What is the major challenge that you have come across with the rising costs and how are you combating the same?
The major challenge we are facing with the rising costs for our real estate projects is finding cost-effective solutions that still provide high quality results. We have been exploring different ways to reduce costs, such as utilising new technologies and materials, negotiating with suppliers to get the best deals, and looking into other alternative options.

How do you envision the future of real estate development and consumer behaviour with the rising cost of cement and other construction materials?
We believe that real estate development and consumer behaviour in the future will be heavily impacted by the rising cost of building materials. A certain section of the consumers will rely more heavily on existing real estate, such as rentals and second homes, to meet their needs instead of buying new properties. However, a bulk of them will certainly opt for their own houses as they have realised the value of owning a home post the pandemic. Developers and investors will focus on creating more efficient, cost-effective designs and materials and will look for ways to maximise their return on investments.

-Kanika Mathur