Updated: November 1, 2021 8:03:36 am
With the rates of basic construction materials including steel, cement, concrete, tiles and paint experiencing a steady rise, those planning to buy a new home will now have to shell out more as the construction cost is expected to increase by almost Rs 300 to Rs 400 per square feet.
According to CREDAI-Pune Metro, the increase in rates will impact the real estate sector, which was on the road to recovery post the second wave of Covid-19.
Experts said the rise in construction cost might adversely affect the industry, which has already been hit by lockdown, migration of labourers and spike in fuel prices. Notably, the real estate sector is a major contributor to the nation’s GDP and provides employment opportunities to scores of people.
According to CREDAI-Pune Metro, between 2019 and 2021, the rate for cement has increased from Rs 275 to Rs 390-410 per bag, while the rate for steel has increased from Rs 40 to Rs 56-57 per kg. Similarly, the rate for concrete has increased from Rs 3,400 to Rs 5,600 per cubic metre.
Speaking on the issue, Anil Pharande, President, CREDAI-Pune Metro said, “Rising prices of essential materials used in construction along with an increase in labour and transportation charges have led to a sharp rise in construction costs. With an increase of 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 industry is the second-largest employment generator in the country and contributes 5-7% of the GDP. “The governments need to come up with some solution to stop the prices of essential materials from rising further. We have been urging the governments to act urgently in the interest of home buyers,” he said.
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