Kolkata, April 3 (IANS): Prices of residential projects in the city are likely to shoot up by at least 10 percent this year in the wake of rising input costs, particularly cement and steel, a senior industry official said on Friday.

"The construction cost is increasing by 10-12 percent every year and cement and steel prices are likely to go up," said Sushil Mohta, president of the Bengal division of Confederation of Real Estate Developers' Associations of India (CREDAI).

"We expect the real estate prices in the city to go up by at least 10 percent on an average this year," he said while talking to reporters on the sidelines of an expo organised here.

Apart from rising input costs, he said, taxes are also contributing to the rising prices.

Mohta said every year, around 15,000 housing projects are undertaken in Bengal, of which 70 percent is in the budget housing bracket. This is followed by standard housing projects comprising 25 percent, with premium housing just 5 percent.

The builders' association has classified economy or budget housing within the price bracket of Rs.20-40 lakh.

"We expect real estate in the state to grow 20 percent this year," he said.

According to the industry lobby, areas around upcoming metro railway projects are likely to register growth.

"Areas like Garia, Joka, Barasat, Budge Budge and several others (around Kolkata) are key areas which will witness substantial development this year," he said.

Mohta said, unlike Delhi NCR and Pune where people buy residential properties mainly for investment, this city's people buy mainly to live in.

"More than 99 percent of the buyers in Kolkata make the purchases to live in," he said.