Prices of construction materials like steel, cement have been steadily rising from last six months. These rates have skyrocketed compared to a few months and as a result, house prices may go up considerably.
CREDAI Nagpur Metro an association of builders and developers working in and around Nagpur region demands government’s serious attention on skyrocket prices of construction material. Government should take this seriously and should be also be investigated that whether the rise in construction material is natural or due to hoarding or profiteering. CREDAI Nagpur Metro also demands that the state government should take this seriously and provide relief to home buyers.
According to statistics, the price of steel, an important component of construction material was Rs. 42000 per tonne a year ago, which is now doubled up to Rs. 84900 per tonne. 18% GST is being charged on steel with which Government’s revenue collection on steel has been doubled with the rising price of steel. Government should think to reduce the GST from 18% to 12% may be temporarily because with this high price of steel government’s revenue collection has also increased. The price of cement is Rs. 400 per bag. Steel and cement the most important ingredient to build your dream house account for 40% of total construction cost.
Similarly, the price of 4- inch bricks was Rs. 6500 per thousand has seen an increase of almost 25 to 30% which is now costing Rs. 8000 per thousand. There is a similar increase in the price of sand and wash sand.
Along with construction materials, other elements like electric wires, fittings, tiles, pipes, sanitary ware, fabrication, aluminum, and most importantly wages have also increased by about 40 percent.
The construction industry, which is the second largest in contribution to GDP and employment has been hit hard by the pandemic.
The war between Russia and Ukraine also having an effect on the construction sector indirectly.
This rise in prices of construction material is going to affect the common people who are planning to buy their dream home.
The prices of construction raw materials are steadily inching upwards over the last couple of months and have hit real estate hard. This has affected the developers who are struggling not to pass on the increase to the customers but now cannot hold the same for long; the hike in property prices is certain & inevitable. Confederation of Real Estate Developers’ Associations of India is worried that this increase in raw material is hitting the real estate sector and common people have to shell out more to own their dream home. An increase of 20% to 30% in the selling price of flats is expected from the month of April.