For Biju, a middle-level executive in a private company in Kochi, building a house was a dream. And, with high hopes he began constructing his dream home an year back.
However, the skyrocketing material cost has turned a villain. Today, he has to shell out around `2 lakh more compared to the budgeted price. This is not an isolated case.
The escalating material cost is affecting the construction sector. If the indications are to be believed, the cost will move northwards in the coming days too. The major materials which have shown an increase in price are brick, quarry sand, river sand, cement, cement brick, laterite stone and tiles.
T Padmajan, state president, Kerala Builders Association said the increase in raw material and transportation cost are the major culprits which contributes to hike in building material cost. “Compared to a year ago, the price of many materials has increased considerably. For certain materials, the price hike is more than the nominal one which is expected by the industry. The ultimate loser in the scenario is the consumer as he has to find more money to own a house. In cities, the labour cost is another factor which makes things worse,” he added.
Industry experts said when the price moves up without any control the collapse of the industry will be the after effect. Gokulam S Venugopal, managing director, Gokulam Builders said considering many factors the builders will be forced to increase the project cost and material price hike is a prominent one.
“Builders are charging customers based on land cost, material cost, labor cost and marketing cost along with a reasonable profit. As CREDAI’s code of conduct is in place they can’t charge the consumer in an unethical manner. So material cost and land cost hike are two major factors which will impact the sector more,” he added.
The builders are getting cement and other materials at a lower rate but the retail price of these materials, particularly cement is making the common man crazy, a city based builder said.
“We are producing only five per cent of cement of our requirement in the state, the rest has to be imported. Transportation cost is high which makes the material unaffordable for common man,” he added.