CREDAI pledges to pass GST rate cut benefits to homebuyers if cement and steel suppliers reduce prices
CREDAI has pledged to pass on GST rate cut benefits to homebuyers, but said this depends on cement and steel suppliers reducing prices
Credai, a real estate developers’ body, has assured that savings from recent GST rate cuts on construction materials will be passed on to homebuyers, but said the extent of the benefit will depend on how much of the tax cut is reflected in price reductions by cement and steel suppliers.
It said that GST rationalisation has created a “feel-good factor” among homebuyers, boosting positive sentiment ahead of the festive season, and noted that the reduced tax burden could help bring down property prices, especially in smaller cities.
New GST rates are applicable from September 22.
“We are still evaluating how much of the cost benefit can be passed on. But, we will pass it to the buyers, so if the end price is less, then the GST will be less, and the stamp duty will be less,” Boman Irani, chairman of CREDAI, told HT.com on the sidelines of the 23rd edition of NATCON being held in Singapore.
He acknowledged, however, that the extent of any reduction in property prices will largely depend on how much construction input costs, such as steel and cement, actually fall, and how quickly these savings flow through the supply chain.
“We operate on a volume-driven business model, and our focus is always on ensuring maximum efficiency so that we can pass on as many benefits as possible to the end buyers,” said Irani.
“However, one of the challenges we continue to face is the high stamp duty, which remains outside our control and needs serious consideration from state governments. That adds a significant burden to homebuyers even when other costs are rationalised.”
On the construction side, CREDAI noted that while the GST cuts on inputs like cement and steel are welcome, the market for these materials is dominated by a few suppliers.
“This means our dependence on them remains very high, and the actual benefit we can transfer to buyers ultimately depends on how much of the tax cut is reflected in real price reductions by these suppliers. We expect to have better clarity on this probably by the end of the month,” he said.
Earlier, the India government revised the Goods and Services Tax (GST) on certain construction materials and inputs, such as cement, steel, tiles, and other finishing components, reducing the rates to help lower costs in the real estate sector. The move is part of a broader effort to stimulate housing demand and make homes more affordable amid rising inflation and supply-side pressures.
GST rate cuts: Tier-2 cities may benefit more than metros like Mumbai
Boman Irani noted that the impact of GST and cost reductions will likely vary across regions. “Any segment that might benefit is tier-2 and tier-3 cities, where construction costs are higher than land costs; there, the impact may be more pronounced. However, in metro cities like Mumbai, where land costs are substantially higher than construction costs, the impact will be lesser.”
Echoing this, Shekhar Patel, president of CREDAI, offered an example: “If the GST on cement is cut by 10%, and a bag of cement currently costs ₹350, then the price should drop by about ₹30. So we have to see how much of this reduction actually translates into savings in the construction sector.”
Buyers ‘feeling good’ after the GST cut, says Shekhar Patel, president, Credai
Shekhar Patel noted that the GST announcements have sparked a strong sense of optimism in the market, giving buyers the impression that “something positive is happening.”
“We have seen a substantial rise in buyer inquiries, and demand has particularly strengthened in the mid-segment housing category, typically in the ₹1–4 crore range,” Patel said.
Irani told reporters that, "GST rationalisation has generated feel good factor among people. There is a positive sentiment among consumers, which is a good sign ahead of festival season".
Boman Irani says real estate offers a reliable hedge against inflation and long-term wealth creation
Boman Irani explained that inflation plays a crucial role in shaping real estate investments.
“All costs are tied to inflation, and real estate remains the only true hedge against it. For example, if you buy a home today for ₹40 lakh, then with natural inflation of about 7–10% annually, the property’s value should ideally grow in line with that rate. By investing earlier, you not only protect yourself against inflation but also benefit from the compounding effect and additional profits as prices rise year after year,” he said.
He said that this inflation-adjusted growth makes real estate a unique long-term wealth builder compared to other asset classes. “While inflation erodes the value of money kept idle, owning real estate ensures your asset keeps pace with or even outpaces inflation, making it a stable hedge and a strong generator of value over time,” he noted.
The author is in Singapore at the invitation of Credai
