Property Plus
Coimbatore
Steel prices soar as summer simmers
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Construction costs could well shoot up by Rs. 120-130 per square foot, says T. Lalith Singh
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Photo: P.V. Sivakumar
Vital ingredient: The phenomenal price spiral in these iron rods so integral to construction is sure to make a hole in the pocket.
Summer has just set in and as far as real estate in Hyderabad and suburbs is concerned, signs are that it is going to be a real hot one. Whether mercury rises or not for record temperatures, this season appears set to witness some rough weather in construction sector amid anticipations that the budget for acquiring a property could touch new highs.
The builders these days are not mincing words in making it known that the per-square foot cost could well shoot up by around Rs.120 to Rs.130 in the coming days. And they blame the steep hike in the prices of construction material, particularly steel and cement, for straining your purse.
Thus, if you are planning to buy a flat, independent house, duplex or a villa, perhaps it is time you brace yourself to stretch the estimates. The main grouse of the building fraternity is directed against the sudden and steep rise in steel prices which has crossed the Rs. 50,000 per tonne mark in last few days. It leapfrogged from Rs.38,000 in just a matter of months and is being made available as high as Rs.55,000 per tonne, it is being said. The prices rose gradually from Rs.20,000 to Rs.38,000 over the last few years but then started hopping by thousands in months. “An artificial scarcity is being created to export the steel and the prices are getting hiked this way,” alleges C. Prabhakar Rao, president, Greater Hyderabad Builders Federation.
If the requirements in the form of grills, frames, bolts and others are included, almost 3.50 kg to 4 kg of steel is what goes into each square foot of constructed space. Procurement of the material at the increased rates will translate into the end-user having to pay around Rs.100 more per sft. on account of steel alone, it is pointed out.
However, the sharp rise might not affect the bigger projects and those handling multiple projects. The explanation being such, corporate builders usually go for large consignments and the same are booked well in advance with a commitment of delivery at prices prevailing on the day the order is placed. Whereas, the small and medium builders who cannot block such huge amounts for delivery at a later date ends up procuring the material as and when required.
“Also, the big builders take delivery directly from the manufacturer while the others end up dealing with distributors and local dealers,” explains Mr. Rao.
The construction industry also complains about the short supplies of cement and its prices too keeping a steady march upwards. Depending on the availability, brand and location, a bag comes at anywhere between Rs.165 to Rs.210 and at times, it also goes up to Rs.230. Add this rise and the overall pricing of a constructed premise is going to get nudged further ahead.
The general perception in the cement industry too happens to be about possibilities of a further rise in prices and it might even touch the Rs.300 mark in due course. All this could mean the average property price inching towards Rs. 3,500 per sft and beyond. Summer happens to be the season that witnesses heavy construction activity and buyers too prefer booking properties after February as it is considered an auspicious period.
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Property Plus
Coimbatore
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