Real Estate Sector: Due to the huge increase in construction cost in the housing sector, there has been a huge increase in the prices of houses in big cities. According to real estate consultant Colliers India, the average construction cost of housing projects has increased by 39 percent in the last four years due to increase in the cost of building materials and labor.
According to data from Colliers India, the average construction cost in premium housing projects was Rs 2000 per square foot in October 2020, which will increase to Rs 2200 per square foot in October 2021 and Rs 2300 per square foot in October 2022. Rs 2500 per square foot in October 2023 and will increase to Rs 2780 in the month of October 2024. It has reached Rs per square foot. That means construction cost has increased by Rs 780 per square foot in the last four years.
According to Colliers India, this is the average construction cost of a Grade A residential building with 15 floors and this cost is for Tier-1 cities. According to the data, the average cost of construction of housing projects has increased by 11 percent in the last one year. Construction of houses has become expensive due to increase in prices of construction materials like sand, brick, glass, wood along with huge increase in labor cost. However, there has been a slight increase in the prices of construction materials like cement, steel, copper and aluminium. But due to 25 percent increase in labor cost in a year, there has been a huge increase in construction cost.
Colliers India CEO Badal Yagnik said, last year the increase in prices of major construction materials has been modest but construction cost has increased due to increase in labor cost. The share of labor cost in the construction cost of housing projects is around 25 percent.
Anarock said in its report that there has been a huge jump in property prices in India. Especially in the top 7 cities of the country, the average house price has increased by 23 percent to Rs 1.23 crore in the first half of the financial year 2024-25, which was Rs 1 crore in the first half of the last financial year. That means the average price of houses has increased by Rs 23 lakh. House prices in Delhi NCR have increased by 55 percent on an annual basis. It has increased by 44 percent in Bengaluru. House prices have also increased in Hyderabad, Chennai, Pune and Kolkata.
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