The Bengal chapter of the Confederation of Real Estate Developers’ Associations of India (CREDAI) claims that construction cost has increased by 43 per cent in the last two years. In the same period, steel prices have increased by 107 per cent, while the cost of cement and bricks has increased by 39 per cent and 52 per cent, respectively.

Despite the escalating property prices and skyrocketing interest on home loans, CREDAI says the demand for real estate has not gone down. Contesting its claim, NK Realtors says that the real estate sector in West Bengal has registered a drop in sales by 30 per cent in the last few months.

CREDAI, however, has a different take. In fact, it insists that it is the best time to buy property. The association warns that buyers waiting for real estate prices to scale down could miss the bus as prices were only set to go up further.

“Price rise in construction material is substantially higher than the national inflation rate,” said Pradeep Sureka, president of CREDAI Bengal.

In the next few months, cost of a residential apartment could go up by at least Rs 100 to Rs 500 per square feet, said a CREDAI official.

In fact, there could be further increase if steel prices shoot up. Ruling out any fall in real estate prices, Sureka said, “We have no option. Either we increase prices or close the business.”

He also said that the real estate prices in Kolkata were always reasonable because the bulk of the demand for property is accounted by actual consumers and not by investors.

In Kolkata, people who buy property for investment account for only 5 to 7 per cent, while in Gurgaon the corresponding figure is nearly 70 per cent.

Property prices in West Bengal have increased by 20 to 30 per cent in the recent months. The CREDAI has decided to put a further escalation on hold until the Home Front 2008, an event where nearly 50 developers will showcase 250 properties in Bengal, is over.