Building materials cost increase puts construction sector in dilemma
Mumbai
As per to the source saying @ the www.propertykhazana.com, construction and infrastructure segment is facing thorny because of increase in the price of cement and steel having vertical hike in the rates of these main investments. Steel involves around 15-25% of the total cost, but cement is 10-20% of the total cost of the venture. From couple of weeks, construction rates are going high for 10-20% as the mishmash of frail dollar and high crude oil rates filter their path through the economy. Weak dollar and international demand is the reason for materials products to hike and building material are also going high. In addition, fuel rates further leads to the problem by hiking the transport costs. Meantime, the cost of the construction has gone high by 10% and Steel rates in domestic market are increased by 30% in the past 6 months.
Vikaas Ahluwalia, Director of Ahluwalia Contracts Ltd. said to www.propertykhazana.com that, “There is a hike in cement and steel rates which has led to scramble in the cost of building materials. Also it is questioning our hard work to give reasonable residence for middle and lower middle sector purchasers. But, this won’t continue in rate increase, but can also be endorsed to market forces. Difference among demand and supply of these materials is likely to be usual and the high rates of steel and cement will slowly come down.”
Cement & Steel is of 33% of construction price and all 50% rise in the rate of materials will hike the cost of realty by Rs. 70-100 per Sq.ft. Average cost of newly developed realty will be ended at 8-10% from original rates. Kamal Taneja, MD of TDI Group in a verbal communication said at the www.propertykhazana.com that, “There is a large increase in the cost of construction by 20% with hike of cement & steel rates.”
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