Kochi: House construction is a prime activity for Keralites. With the recent spike in prices of iron, cement, aluminium and PVC products, the planned budget for building houses may have to be revised.
Though construction activity resumed recently after the COVID lockdown, there is a shortage of raw material owing to production cuts in factories or mines.
Iron rods or steel bars which are used for reinforced concrete cost about Rs 50-68 per kg in Kerala. A bag of cement is quoted at Rs 390-400. Paint prices have also risen with the rising cost of petroleum products. Aluminium products and PVC pipes are sold at higher rates.
A 1,000 sq ft house would cost an additional Rs 2 lakh now if the latest prices of pipes, tiles and paints are considered. In other words, per square feet increase in house construction cost will be up to Rs 200.
The additional cost would run into crores for builders raising a flat or tower.
Cement
The price of a bag of cement has increased from Rs 330 to Rs 380-390, registering a hike of Rs 50. For instance if 500 bags of cement are required to build a 1,000 sq ft house then one will have to shell out an additional Rs 25,000 to Rs 30,000.
Steel
The prices of iron used for reinforced concrete, cast iron, sheet iron and steel plates have been on the rise since November.
The price of iron used for reinforced concrete has increased from Rs 45/kg to Rs 68 and according to projections it is likely to go up to Rs 72. In other words there will be nearly 50 percent increase in its price soon!
A 1,000 Sq ft reinforced concrete house requires 3-4 tonnes of iron. With the price increasing by Rs 23/kg the increased price for each tonne would be Rs 23,000. For about 4 tonne, you may have to shell out Rs 1 lakh.
Aluminium, PVC products
The prices of aluminium and PVC have increased 20 percent and 30 percent respectively. Naturally, the indispensable purchases for electrical wiring, plumbing and interior works will get dearer.
Flats and big buildings
If the hike in prices of just steel bars is taken into account mega projects would incur additional expenditure worth crores of rupees. For instance if a particular project requires 700 tonnes of iron and the hike is Rs 10, then the additional cost would be Rs 70 lakh and if the hike is Rs 25 the cost would be additional Rs 1.75 crore.
The additional burden triggered by price hike will fall on the consumers as there is no other alternative. This may turn the consumers away from the housing market. Builders are wary of the looming crisis especially in the housing construction sector.
