The surge in prices of steel products that are used in the construction sector has an adverse impact on the real estate companies as these entities are now not in a position to pass the additional cost on their buyers and may witness shrinking of margin by 4-6 percent, realtors said on Tuesday.

The steel prices have increased at a time when demand for property is slowly getting back on track with the government measures and low interest rate regime, they said. The price of construction steel or TMT bars had recently touched Rs 45,000 a tonne in some markets, which was at least 30-40 percent higher than the rate in the pre-COVID period. "The steel price rise is hurting the real estate companies as the property prices are under pressure.

Real estate industry body Credai Bengal president Nandu Belani said the spurt in steel prices will reduce the margin by 4-5 percent, which is quite high for the sector. Presently, only the residential sector has seen a revival of demand, while the commercial and industrial segment is still reeling under pressure, and the high cost will discourage builders to delay the launch of new projects, the officials said.

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