In order to cut construction cost Credai plans to buy building materials in bulk

Q: Why is Credai moving toward bulk buying? Apart from cost cutting, is there any other reason?

Shalini Parikh, Mumbai

8th April 2015

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Replies (6)

I think it is a good Move by Credai as it can bring down the selling price of the property. We have also seen the rising costs of inputs like cement, steel and sand over the past few years. Now, it was essential for the real estate industry to find ways to control and manage costs as sales of residential properties are standstill.

Shrikant Kejriwal, Mumbai

11th April 2015

Comment

Thanks Shrikant,
What is the percentage of various materials used in construction? Is this a clever move by Credai? Will this move bring down the selling price of the properties?

Pravakar Saxena, Pune

10th April 2015

Comment

Yes, Credai has identified various large domestic and global manufacturers of several building materials and has started talks with them, looking for substantial cost gains by way of purchase of large volumes for longer periods. They may even come out with global tenders, if needed, to encourage competition among the manufacturers of building materials to create competitive prices. They will think about importing from the global markets when it works out cheaper.

Shrikant Kejriwal, Mumbai

9th April 2015

Comment

Has Credai talked with the domestic and global manufacturers for various building materials? Will they pass tender for that?

Pravakar Saxena, Pune

9th April 2015

Comment

Thanks Roshini,
Had the Credai experimented with the bulk buying earlier? How was the previous buying result and what are the expecting this time?

khushisha, Mumbai

8th April 2015

Comment

Yes, Credai had experimented successfully with the bulk buying model on a lead basis earlier by getting large quantities of cement from the Cement Corporation of India. This time they could not continue with the bulk buying model as the industry body did not have numbers those days. Today they are pretty large community and can think about presenting their bargaining power with the manufacturers to gain significantly over standard buying models.

Roshni Pawal, Mumbai

8th April 2015

Hello Shalini,
Credai's main aimed at cutting costs for its members numbering more than 11000 across the country. Because of that Credai s looking at bulk buying to get most of the building materials directly from manufacturers. As per the report they are preparing to experiment with the bulk buying model shortly.

Roshni Pawal, Mumbai

8th April 2015

Comment

HI Roshini,
What is bulk buying? Is this move come because of because of piled up inventory over the last few years?

Shaunak Verdla, Mumbai

8th April 2015

Right Shaunak,
Credai's move comes at a time when property developers are stuck with Rs 6.2 lakh crore worth of unsold residential stock piled up over the last few years. The sale of residential units fell to 2.34 lakh units in 2014, a drop of 17% compared to the previous year, while new launches saw a extreme fall of 28% at 2.68 lakh units during the year.

Roshni Pawal, Mumbai

8th April 2015