29 , March , 2022
Owing to the increased raw material prices like steel and cement, there has been a steep rise of 10-12% in the average cost of construction for housing projects over the past one year. It is also estimated that it may further rise by 8-9% by December.
Colliers India in a statement said, “Over the last one year, developers’ average cost of construction has risen 10-12 per cent, owing to a higher input cost due to supply-side constraints. The cost of key materials like cement and steel have risen over 20 per cent yearly as of March 2022. These constitute a predominant share in the total cost of construction”.
The consultant feels since the market was rebounding from the aftermath of COVID-19, therefore, the developers were reluctant about increasing prices. However, developers have now started feeling the pinch of rising cost and they have started reviewing their pricing strategy.
Ramesh Nair, COO, Colliers India, stated “With rising material cost, developers will be compelled to increase prices as construction materials account for about two third share in the total cost of construction. Developers have already been operating on thin margins over the last few years”.
Colliers India said that the average cost of construction of residential properties rose to Rs. 2,300 per square feet in March 2022 from Rs.2,060 per square feet a year ago.
(WITH INPUTS TAKEN FROM AGENCIES)
