Pune: Buying A New Home To Cost More, Construction Cost To Increase By Rs 300 To 400 Per Square foot

Pune, 29 October 2021: With day-to-day increase in the rates of basic construction materials including steel, cement, concrete, tiles, paint along with other essential input costs, home-buyers who are planning to buy a dream home will now have to shell out more as the construction cost is all set to increase by almost 300 to 400 per square foot. According to CREDAI- Pune Metro, the latest development in the rates accordingly will impact the real estate sector, which is on the road to recovery post Covid 2nd wave.

As factors like Corona related lockdown, migration of laborers along with rising prices of fuel has already had an adverse effect on the real estate sector, which plays an important role towards the economic development of the country and is known as a major contributor to the GDP as it provides hundreds of employment opportunities, the increase in the construction cost will further weaken the functioning of the industry.

According to CREDAI-Pune Metro, from 2019 to 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 meter while the price of Tiles has increased by almost 20-30%.

Speaking on the issue, Anil Pharande, President, CREDAI-Pune Metro said, “Rising prices of essential materials used in construction work like steel and cement along with labour and transportation charges has 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.

It should be noted that the real estate industry is the 2nd largest employment generator in the country & contributes to 5-7% of the GDP giving support to more than 250 ancillary industries. In the interest of the home-buyers, CREDAI has been requesting the Central and the State Governments from time to time to pay immediate attention to this issue.