Aurangabad, Dec 9:
While the central and state government is giving various concessions to encourage the construction sector and home buyers, the rising prices of steel, cement and sand have skyrocketed, which has made buying home expensive for the common man.
Over the past month, the cost of construction materials have been rising steadily. The price of a 50 kg sack of cement has gone up by Rs 20 to Rs 40 and is being sold at Rs 360 to Rs 400 a sack. Steel prices are also being hiked by Rs 8 per kg taking the price of a kilo of steel to Rs 50. The price of iron pipe was Rs 58 per kg a month ago. The price has gone up by Rs 12 and is being sold at Rs 70 per kg. In addition, the price of sand in Gujarat has increased by Rs 6,000 per 30 tonne. Hence sand now cost around to Rs 46,000 for a 30 tonnes vehicle. Even with the unauthorized dealers, the price of a 22 tonne sand vehicle costs around Rs 25,000 to Rs 26,000. However, the price of rubble and bricks have not gone up. According to the builders, about 1,000 square feet of construction requires 600 bags of cement, 4,000 kg of iron, 40 to 50 brass of sand, 20 to 30 brass of rubble and 30,000 to 40,000 bricks. This has increased the cost of construction. Vice president of Confederation of Real Estate Developers Association of India (CREDAI) Nitin Bagdiya said that if the situation remained the same, house prices would go up by about 10 to 20 per cent from January.
Price rise due to rise in demand
According to officials at the cement and steel companies, construction work was halted in the lockdown. However, construction has gained momentum since Ganeshotsav. The builders want to complete the projects on time and hand over the house to the customers. Consumers want to take advantage of the 3 per cent reduction in stamp duty. This increased the demand for houses. As a result, demand for construction materials has increased. Cement and steel prices have risen due to the government projects undertaken by the central and state government. This has created a gap between supply and demand.
Monopoly of companies
The price of cement and iron is not controlled by the central or state government. As a result, companies are raising prices arbitrarily. The final blow is falling on the average consumer. The government should intervene to control cement and iron ore prices, said Vijay Jaiswal, vice president, Zilah Vyapari Mahasangh.