With the prices of basic building materials, including steel, cement, concrete, tiles and paint, steadily increasing, those planning to buy a new home will now have to shell out more as the cost of construction is expected to increase by almost 300 to Rs. 400 per square foot.
According to CREDAI-Pune Metro, the price hike will impact the real estate sector, which was on the road to recovery after the second wave of Covid-19.
Experts said rising construction costs could negatively affect the industry, which has already been hit by foreclosure, labor migration and soaring fuel prices. In particular, the real estate sector is a major contributor to the country’s GDP and offers employment opportunities to dozens of people.
According to CREDAI-Pune Metro, between 2019 and 2021, the price of cement went from Rs 275 to Rs 390-410 per bag, while the price of steel went from Rs 40 to Rs 56-57 per kg. Likewise, the price of concrete went from Rs 3,400 to Rs 5,600 per cubic meter.
Speaking on the matter, Anil Pharande, President of CREDAI-Pune Metro, said: “Rising prices of essential materials used in construction as well as rising labor and transportation costs have resulted in a sharp increase in construction costs. With an increase from Rs 300 to Rs 400 per square foot, buying a house will become more expensive in the near future. The cost of affordable housing projects is also expected to increase significantly. “
Experts said the real estate sector is the second largest generator of jobs in the country and contributes 5-7% of the GDP. “Governments must find a solution to prevent the prices of essential materials from continuing to rise. We urged governments to act urgently in the interests of home buyers, ”he said.