Rising cost of cement, steel push up construction cost up by 40%
Concrete

Rising cost of cement, steel push up construction cost up by 40%

According to information, the steel cost has increased from Rs 46,000 to Rs 48,000 per tonne to Rs 69,000 to Rs 72,000 per tonne.


The cost of construction has increased by 35-40% due to steep rise in prices of raw materials such as cement, steel and sand in Andhra Pradesh. The builders have crossed their fingers as they would have to shoulder Rs 5 lakh to Rs 10 lakh per unit if the cost escalation were to be borne by them in view of the RERA rules.

According to information, the steel cost has increased from Rs 46,000 to Rs 48,000 per tonne to Rs 69,000 to Rs 72,000 per tonne. The “sand is not available at a price not less than” Rs 1,100 per tonne. Similarly, the cost of cement too shot up. The cement used to cost Rs 280 to Rs 300 per bag depending upon the quality and brand. Now, it costs Rs 400 to Rs 450 per bag. The costs of other fixtures such as electricity, plumbing and tiles have also increased. As a result, the cost per sq ft has gone up to Rs 4,500 to Rs 5,500. It was about Rs 3,500 per sq ft a few months ago, sources in the construction industry say.

When contacted, R.V. Swamy, Convenor (Public Relations and Media Affairs Committee), the Confederation of Real Estate Developers Associations of India (CREDAI) says that the cost of construction of a unit has gone up by about 40%. Earlier, a flat used to cost Rs 40 lakh depending upon the factors such as sq ft area etc. Now, the builder has to sell a flat at Rs 45 lakh to Rs 50 lakh if the rise in prices of raw materials were to be taken into account, he explains.

As the builders have already entered into an agreement with the buyers under the Real Estate (Regulation and Development) Act (RERA), they are clueless as to what to do. For new projects, the increase in prices can be passed on to the buyers but it may not be possible for already existing agreements under the RERA. The construction sector was already hit by the pandemic and related restrictions. The industry is now facing blow with the steep rise in cost of materials. The government has to take proactive steps to resolve the issue, he says.

As per the industry sources, there are about 8,000 to 10,000 ongoing projects across the State. In Vijayawada and Visakhapatnam, about 1,200 to 1,400 projects each are under progress. Remaining are in cities and towns such as Guntur, Tirupati, Kurnool, Rajahmundry, Kakinada etc. The flat space falls in the categories of 800ft, 1,000ft, 2,000ft and 3,000ft. In all, 2,500 to 3,000 builders have crossed their fingers.

Image Source

According to information, the steel cost has increased from Rs 46,000 to Rs 48,000 per tonne to Rs 69,000 to Rs 72,000 per tonne. The cost of construction has increased by 35-40% due to steep rise in prices of raw materials such as cement, steel and sand in Andhra Pradesh. The builders have crossed their fingers as they would have to shoulder Rs 5 lakh to Rs 10 lakh per unit if the cost escalation were to be borne by them in view of the RERA rules. According to information, the steel cost has increased from Rs 46,000 to Rs 48,000 per tonne to Rs 69,000 to Rs 72,000 per tonne. The “sand is not available at a price not less than” Rs 1,100 per tonne. Similarly, the cost of cement too shot up. The cement used to cost Rs 280 to Rs 300 per bag depending upon the quality and brand. Now, it costs Rs 400 to Rs 450 per bag. The costs of other fixtures such as electricity, plumbing and tiles have also increased. As a result, the cost per sq ft has gone up to Rs 4,500 to Rs 5,500. It was about Rs 3,500 per sq ft a few months ago, sources in the construction industry say. When contacted, R.V. Swamy, Convenor (Public Relations and Media Affairs Committee), the Confederation of Real Estate Developers Associations of India (CREDAI) says that the cost of construction of a unit has gone up by about 40%. Earlier, a flat used to cost Rs 40 lakh depending upon the factors such as sq ft area etc. Now, the builder has to sell a flat at Rs 45 lakh to Rs 50 lakh if the rise in prices of raw materials were to be taken into account, he explains. As the builders have already entered into an agreement with the buyers under the Real Estate (Regulation and Development) Act (RERA), they are clueless as to what to do. For new projects, the increase in prices can be passed on to the buyers but it may not be possible for already existing agreements under the RERA. The construction sector was already hit by the pandemic and related restrictions. The industry is now facing blow with the steep rise in cost of materials. The government has to take proactive steps to resolve the issue, he says. As per the industry sources, there are about 8,000 to 10,000 ongoing projects across the State. In Vijayawada and Visakhapatnam, about 1,200 to 1,400 projects each are under progress. Remaining are in cities and towns such as Guntur, Tirupati, Kurnool, Rajahmundry, Kakinada etc. The flat space falls in the categories of 800ft, 1,000ft, 2,000ft and 3,000ft. In all, 2,500 to 3,000 builders have crossed their fingers. Image Source

Next Story
Technology

AirBrick Infra Sets Rs 1 billion Target, Expands to Dubai and Tier-II Cities

AirBrick Infra, one of India’s fastest-growing AI-led commercial interior design and build firms, has announced a sales order target of Rs 1 billion for FY 2025–26. The projection represents a 50 per cent growth over the previous fiscal year and reflects rising demand, increased repeat business, and the company's robust tech-first delivery model.  Now in its third year of operations, AirBrick continues its rapid scale-up, having successfully delivered over 70 projects spanning 3 lakh sq ft in FY 2023–24. FY 2024–25 witnessed the onboarding of several Fortune 500 clients, sett..

Next Story
Resources

Virtusa Foundation Powers Green Education Drive in Bengaluru

The Virtusa Foundation, CSR arm of digital engineering and technology leader Virtusa Corporation, has announced key infrastructure and mobility initiatives at the Ramakrishna Mission, Shivanahalli, Bengaluru. The launch marks the inauguration of a 16-room residential facility for lady teachers and the deployment of two solar-powered electric buses, underscoring Virtusa’s commitment to its core pillars of Education, Environment and Empowerment (3Es).  Located on the forest fringe near Bannerghatta National Park, the initiative supports tribal and underserved communities, complementi..

Next Story
Infrastructure Urban

Godrej Enterprises Drives India’s Smart Green Logistics Shift

As India accelerates its transformation into a global manufacturing and logistics hub, Godrej Enterprises Group (GEG) is taking the lead with its smart, sustainable intralogistics solutions. Through its Material Handling Equipment (MHE) and Storage Solutions businesses, GEG is redefining operational efficiency in modern warehouses and factories using IoT, automation, and AI. GEG has consistently maintained a 20–25 per cent market share in the intralogistics sector over the past three years. Today, over 37 per cent of GEG’s revenues come from its Good & Green portfolio, and its net..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?