The report states that construction materials costs have risen by 32% within three years. And this is now impacting the planned cost margins and operational and project completion plans of construction companies.
The ‘Construction costs update’ section of the report specifies the analysis of costs of construction materials, along with a total average of construction costs for Grade-A residential buildings of 15 floors and pre-engineered Grade-A industrial buildings
Reducing exports and minimizing import duties are the two strategies that the government is experimenting with to track raw materials costs in the past few months.
Considering March 2022, the construction prices have grown by 10-12% year on year and 20% increase in construction material costs.
Fuel and labour costs have increased because of geopolitical issues, inflation, and other factors as well. These things are impacting the developers who are in high debt.
November 2022 reports clarify that construction material costs have been reduced by 8% compared to March 2022. A cost-declining percentage of aluminium is 55% and 6% of steel.
But, the cost of cement and copper has increased by 9% and 3%. Similar scenario with labour costs as well.
However, the decrease in fuel cost has made the overall construction cost stable from March 2022.
The CEO of Colliers India said “At present, the geo-political issues, continuous lockdown in China, and global recession will keep the construction material costs volatile for another few months. So, developers are changing the dates of their new launches and increasing construction costs, making them focus on their decisions over their current plans and their timely delivery.”
The Chief Technical Officer of Colliers India said “As the cost of construction price is varying a lot, developers are planning their new launches before itself to timely complete those plans. And they aim to store the material well in advance once the key construction material prices get stable.”
