Surging steel prices may make houses costlier, say builders
According to the builders, the increasing construction costs due to the Ukraine war may shortly leave houses costlier. The Nagpur unit of the Confederation of Real Estate Developers of India (CREDAI) has additionally sought government intervention in the issue. CREDAI has demanded a government investigation to find out whether the cost increase is because of cartelisation in the steel sector. Builders, however, additionally attribute it to the war in Ukraine. The conflict has added to the increase in costs of construction material, particularly steel, apart from plastics and other alloys that go into building real estate, they say. The builders claim that it may eventually lead to a surge of 20% to 30% in the selling price of real estate in new projects. A note shared by CREDAI says costs of steel have doubled to Rs 84,000 a tonne since a year. A cement bag presently costs Rs 400 a bag. The two components make up 40% of the total construction price. Bricks, which cost Rs 6,500 per thousand are presently Rs 8,000. Cost of other items such as wires, fittings, aluminium and even wages have increased by 40%. Gaurav Agrawala, secretary of CREDAI, told the media that from the earlier base level of Rs 1,800 per sq ft, the construction price might easily cross Rs 2,100, and in premium projects, it would go to Rs 2,500 sq ft. It may lead to an increase of Rs 300 per sq ft in sale cost too. Agarwala told the media that he plans to increase rates of unsold units at one of his projects at Lakadganj to fulfil the increased cost. In October-November 2021, diesel costs influenced the sale cost, which increased by Rs 100 to 150 sq ft. He said that the war has led to a significant increase in the cost of coking coal, which is used in steel making. Even costs of iron ore, the raw steel material, have increased. Image Source
Also read: CREDAI to increase flats prices by 10-15% from April 1 in Rajasthan
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