According to JLL's latest Construction Cost Guide, it is anticipated that there will be an average increase of 6% in the overall construction cost in the country across various sectors in the financial year (FY) 2024. The guide indicates that Mumbai remains the most expensive city, with costs being higher, while Chennai offers a more cost-effective option. The higher costs in Mumbai are attributed to the increased prices of essential construction materials such as cement, reinforcement steel, structural steel, and stones.
The guidebook offers insights into market trends and construction costs of real estate assets in major Indian markets. It features a cost matrix representing different styles and quality levels, along with an analysis of market trends for major building materials.
Jipu Jose James, Managing Director of Project Development Services (PDS) at JLL India, commented that businesses are currently reassessing their real estate choices to optimize spending. He noted that while the exact impact of the pandemic on construction costs is still under discussion, the general trend indicates a rise in construction costs.
As a result, customer expenditure is expected to prioritize aspects that enhance the end-user experience. James emphasized the importance of understanding and effectively managing costs to maintain budget control and deliver economically viable, high-quality projects.
The report also observes that labor costs are expected to increase. While several factors influence the cost of construction in India, labor is identified as a critical driver of economic growth. Consequently, as construction activities expand into non-metropolitan and rural areas, the supply-demand gap for labor is narrowing, leading to a more stable labor market and reduced wage disparities.
