Construction costs rise due to steel being expensive, house prices may increase
The skyrocketing prices of steel are now troubling buyers. The price of houses will increase in the coming days. According to the developers, due to the rise in steel prices, the cost of building a house has increased by Rs 150 per square foot. This can increase the price of a thousand square feet house by 1.5 lakh rupees.
Steel became costlier by Rs 2,750 per ton in a week
During the last one year, the wholesale price of steel in Mumbai has increased by 55% to Rs 58 thousand per tonne. It was Rs 37.5 thousand per tonne on 1 January 2020. According to a brokerage company, wholesale steel prices have risen by Rs 2,750 per tonne in the last one week. After this, steel dealers have also increased prices.
10 kg of steel per square feet used in building a house
Madhya Pradesh CREDAI president Wasik Hussain said that 10 kg of steel per square feet is used to build the house. Due to the price increase, its cost has gone from Rs 550 to Rs 600, which was earlier Rs 400. That is, the cost of constructing an average house whose area is two thousand square feet will increase by about 3 lakh rupees. This will directly affect the pocket of home buyers.
Raw material prices also increased
Most of the steel used in construction is produced by small and secondary mills in the southern and eastern regions. Due to the shortage of workers due to corona and skyrocketing prices of raw materials, their production has decreased. The state mining company NMDC has increased the price of iron ore by 135% in the last 6 months. Its price in December was Rs 4,610 per tonne, which was Rs 1,960 per tonne in June.
Government worried about rising steel price
The government is also concerned over the rising price of steel. Union Minister Nitin Gadkari on Saturday slammed the steel producing companies as well as the cement companies. He said that the government projects would be shocked by the rising price of steel and cement. The government plans to invest about Rs 111 lakh crore in 5 years.
Regulator needed to diagnose the problem
Gadkari said that a regulator is suggested to control the price of steel and cement, but it is not in his hands. However, for this, he will talk to the Finance Ministry and the Prime Minister.
There will not be any relief from the rising prices of steel and cement
Wasik Hussain says that if steel producing companies are increasing prices in concert, it is against the Companies Act. That is a kind of crime. Companies are not increasing the wages of workers. The price hike is going to continue even further because there is no restriction on those companies.
