Planning to build a dream home? It is 15-20% costlier this year

When S Senthil Kumar, 37, started building his own house on a 1,200-sq ft plot last December, he had budgeted Rs 15 lakh for it. But now, he says, the budget might go up to almost Rs 20 lakh as construction materials have become costlier.
“At first, the construction was hit by sand shortage and subsequently sand prices shot up. Then the cost of steel too went up.Now, I would need at least Rs 5 lakh more for going ahead with the construction,” says Kumar, who works at a private company in the city.
Like Kumar, those who had taken up constructing their own houses last year say they face a crisis due to the increase in the price of construction materials from January. Architects from the city say the price rise would result in the increase of construction rates by 15% to 20%.
Last year, construction work was hit by shortage of river sand. The price of river sand, which is now being sold for Rs 4,000 per unit, soared to Rs14,000 last year due to shortage. “Right in the middle of construction, sand prices went up and after a while the supply stopped. So, we had to stop the construction. Later, the prices of other construction materials also went up,” says T R Venkatesh, who is also building his own house. He says he has now incurred heavy debts due to this.
District secretary of the Tamil Nadu AITUC Construction Workers Association S P Tyagarajan says several such people who had taken up constructing houses have been pushed to take loans due to the price rise. “Earlier it cost Rs 1,400 to construct one square foot, now it stands around Rs 2,000,” he said.
Builders in the city say cartelization might be a cause for the increase in the prices of construction materials. “One of the reasons for the increase in the price of the construction materials is the involvement of a cartel,” said L Ganesan, marketing manager at Noble Business Venture, a builder and promoter in Coimbatore. “Groups who supply construction materials decide they wouldn’t supply materials below a price, which leads to the increase in the prices,” Ganesan added.
However, some builders were of the opinion that the affordability of construction had gone down due to Centre’s measures such as demonetisation and GST. “Earlier people would want to build a house and rent it out for extra income. But now that trend has almost vanished. Now only those people who are in immediate need for building a house go for it. This is because construction has become costlier post GST,” said Mohammed Salauddin, 48, a civil engineer from the city.
The rise in prices of construction materials has not only affected people who want to build homes, but also construction workers. Their work had been hit right from the sand crisis, which worsened with the rise in the prices of construction materials, say construction workers. “Now, at least 75% of construction work is hit due to these reasons,” says N Selvaraj, assistant secretary of Tamil Nadu AITUC Construction Workers Association.
“In 2016, around 10,100 construction workers from the union paid their membership fee. But last year only around 1,000 workers could afford to pay the fee, as they had no work” he said.