Recent GST rationalisation on construction materials has delivered meaningful cost relief for the housing sector. The reduction in GST on cement from 28 percent to 18 percent, a key input accounting for nearly 25-30 percent of raw material costs, is expected to lower overall construction costs by 3.0-3.5 percent. Additional GST cuts on marble, granite, sand lime bricks, and stone inlay work from 12 percent to 5 percent further improve cost efficiency, particularly for mid-range and premium housing.
Together, these measures are estimated to reduce total construction costs by 3.5-4.5 percent, improving project feasibility and supporting affordability. With no change in GST rates on property sales, buyer sentiment remains stable, while improved developer margins are likely to encourage new project launches, especially in affordable and mid-income segments.
Under anti-profiteering provisions, these cost benefits are expected to be passed on to homebuyers, reinforcing the reforms’ moderately positive impact on housing supply, affordability, and sector confidence.
Source: CRISIL