New Delhi: Soon, you may have to pay more to purchase your dream home or dream car! The prices of properties and automobiles can increase in India as steel prices (an imperative raw material used in these two assets) may rise in the domestic market of the country in near term. Already, house and car prices have risen significantly in the recent past. In last one year. According to data from the National Housing Bank, residential property prices in India have risen by 10-12% in the last one decade. While, according to automobile industry data, passenger vehicle prices have risen by around 50% in the last five years.
Reason behind anticipated price hike of properties and automobiles in India:
Steel prices may rise in the country as certain steel products which India imports from the entire European Union (EU) region are set to become costlier. This is because India has proposed levying of fresh customs duties on certain steel imports from the EU after the latter decided to continue with imposition of special type of duties on import of steel manufactured in India. India’s step is been perceived as retaliatory in nature.
The tug of war regarding imposition and reduction of tariffs on various commodities subsuming steel has been going on between the EU and India. Discourses are held every now and then. Sometimes they are able to reach consensus but sometimes don’t like in the latest matter.
As steel constitutes nearly 60% of total manufacturing cost of automobiles, so, any price hike in this particular commodity will force manufacturers to augment car prices. While, in case of construction cost of properties, steel prices account for 10-20%. So, any surge in the commodity’s prices will force developers too to hike property prices.
Albeit, in the last one year, the brace metal’s prices have actually fallen. According to ‘bankbazaar’ the brace metal prices have corrected by around 11% in last one year to Rs 40,640 from Rs 45,810. But with fresh tariff hikes, its prices are set to rise in future.
