The average cost of construction of housing projects in big cities has increased by 39 percent in the last four years to Rs 2,780 per square foot. This increase is due to rising rates of construction materials and labour. According to real estate consultancy Colliers India, the average construction cost for premium housing projects was Rs 2,000 per square foot in October, 2020.
This is how prices rise every year
The construction cost increased to Rs 2,200 per sq ft in October, 2021, Rs 2,300 per sq ft in October, 2022, Rs 2,500 per sq ft in October, 2023 and Rs 2,780 per sq ft in October, 2024. Colliers India said these are the average costs for a Grade A residential building with 15 floors.
The advisor said that this figure pertains to metropolitan (Tier-1) cities. The average cost of construction of residential projects has increased by 11 per cent in the last one year due to a steep rise in labor costs and a marginal increase in the prices of construction materials like sand, brick, glass, wood etc.
Cement prices fall
If seen, the overall impact of the increase in prices of four major construction materials including cement, steel, copper and aluminum has been relatively less. In the last 12 months, the average prices of cement have seen a huge decline of 15 percent, while the average prices of steel have seen a decline of one percent. However, the consultant said that labor costs have increased by 25 percent in the last one year.
The average rates of copper and aluminum have increased by 19 percent and five percent respectively. Colliers India Chief Executive Officer (CEO) Badal Yagnik said that although the increase in prices of key construction materials last year was relatively modest, the overall cost of construction is increasing due to labor costs.
