Kochi: A recent reduction in Goods and Services Tax (GST) rates on key construction materials has brought a sense of optimism to Kerala’s housing sector, particularly for individuals planning to build their own homes. However, experts caution that an immediate drop in flat prices is unlikely.

The GST revision, which includes a 10% reduction in tax on materials such as cement, granite, and marble, is expected to reduce construction costs. For those building homes independently, this could translate to savings of up to ₹100 per square foot, offering great financial relief.

The revised rates have rekindled interest in the construction sector among the general public, with many seeing this as a good time to begin or resume building projects. Developers believe the price drop in materials could not only make housing more affordable but also spur growth across the broader construction industry.

No immediate change in flat prices

Despite the GST cuts, the impact on flat prices is expected to be minimal in the short term. Sunil Kumar, Managing Director of Asset Homes, noted that flat pricing is influenced by multiple factors beyond construction material costs, including market demand and land value of the project site.

“Builders are unlikely to reduce the prices of already completed flats, especially those constructed with significant upfront investment,” he explained. “If there’s any price correction, it may only be reflected in future projects, not existing ones.”

Individual homebuilders to benefit the most

The primary beneficiaries of the revised GST rates will be those constructing individual homes. With cement prices alone expected to drop by as much as ₹40 per bag, the cost per square foot could decrease by up to ₹100.

Kurian Thomas, Director of Sales and Marketing at Veegaland Homes, said the reduced rates have encouraged more people to consider building homes, bringing renewed momentum to the construction sector.

However, he added a note of caution. “It’s important to remember that land cost still accounts for a significant portion of overall expenses. If land prices continue to rise while only some construction materials become cheaper, the overall benefit may be limited,” he said.