The situation could hold true for builders at large -- Lodha Group, which has sold 1 BHK flats for around Rs 12 lakh in Dombivali and Rs 21 lakh in Thane; Puravankara, which has sold 1-BHKs in Chennai under its Provident Housing brand for Rs 16.9 lakh, to name a few.

Going by S K Sachdeva, executive director - finance of Delhi-based construction company Ahluwalia Contracts India, the cost of construction for affordable housing projects across the country is Rs 1,000-1,400 per sq ft.

"The developer pays for raw materials like steel and cement and other things, but if there is an increase in labour prices that has to be born by us," says the managing director of another construction company.

"The cost of construction of a project always increases. So, as a hedge, we are not selling the entire property, but we are selling it through the entire life cycle. We have already increased price thrice since we launched our project in April in Chennai where we sold for Rs 1,800 per sq ft in the beginning," said Ravi Ramu, director - finance, Puravankara Projects.

Swiftly, affordable's turning unaffordable for realtors
Clearly, there is no wishing away the threat to margins in projects already sold.

All the same, the developers are not looking to quit the segment just yet.

"We have done sales if 1,300-1,400 flats. It is a volume game and we are coming with further launches in next two quarters. We are waiting for the approvals," said Ramu.

Lodha seems to concur. "Affordable segment is a very important part of our portfolio. It will contribute 25% of our revenue and we are trying to insure low raw material prices by directly buying them from the company and making certain products in-house, such as cement blocks."