Rising steel prices make home dream dearer

Affected by the war in Ukraine and rise in fuel prices – has shot through the roof. As a result, many who had taken out loans, are now recalculating their budgets which may have thrown their plans into disarray. Contractors and traders too are on tenterhooks.

Ramdev R, a techie, said, “I had planned to build an independent house instead of going for a flat. Now, I may have to stop
construction as the cost has been escalated.”

Ramdev is not the only one, however, to have been affected by the steep prices. BK Laskhmipathi, a civil engineer and a contractor, has been constructing houses for the last 35 years. According to him, this is the first time he is seeing inflation hitting the construction activities so much.”

The prices are nowhere near what they used to be even two years ago. And this is not just for steel, but for other construction materials as well. For example, steel used to be sold for Rs 38.8 per kilogram two years back. Now, the prices are Rs 85.9 per kg which is an increase of 121.39 per cent. A cement
bag (25-kg bag) used to cost Rs 270 two years back and now, the prices are Rs 360 per bag — an increase of 33.3 per cent. Electric wires used to cost Rs 5 per kg and have now gone up to Rs 12.5 per kg which is an increase of 150 per cent.

Plumbing and CF-fitting materials have gone up from Rs 100 to Rs 150 per kg. A kilogram of aluminium used to cost Rs 190 in October 2020. This increased to Rs 315 in October 2021 and now costs Rs 440 per kg. The price of ply sheets has gone up from Rs 1,792 to Rs 3,100. The fly ash brick which used to cost Rs 7.25 now costs Rs 9 per brick.

ACC blocks
have gone from 3,290 to Rs 4,000 in the last two years. Realtors say that with diesel prices increasing on almost a daily basis, the prices will spiral further in coming days as travelling costs will now add to the construction cost as well.

Saransh Trehan, Managing Director of Trehan Group, said, “The prices of cement and steel have increased sharply over the last two years. Steel price has increased over 100 per cent, whereas cement price has gone up by more than 30 per cent in the last two years. Similarly, the cost of aluminum materials, electric wire, paints, and stone all increased by more than 50 per cent during the same period.”
Saransh added that this has led to a sharp increase in the per-square-feet construction cost. We have not been able to pass on the increase in input cost to customers.

But the relentless rise in input costs is hurting our profit margins in a big way, and forcing us to think about the future course of action, he said.

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