Construction costs up by 28% as of Nov 2022 but remain stable since March 2022: Colliers

As of November 2022, cost of construction has increased by 28% which is higher than the pre-pandemic (November 2019) levels; but continues to be stable compared to March 2022. The costs of key construction materials have jumped 32% in a span of three years, affecting margins and operational schedules of construction companies. The Government’s efforts in reducing exports and cutting import duties etc have kept raw material costs in check over the last few months.

Costs of key construction materials declined 8% since March’22
Construction costs remain stable since March’22
Costs likely to remain volatile for next 6-18 months

As of March 2022, construction costs rose 10-12% YoY, owing to a 20% increase in key material costs. Key construction materials such as Cement, Steel, Aluminium, and Copper saw a significant increase, along with fuel and labour costs, due to geopolitical issues, inflation etc. This created a challenge for developers who were facing high debt and liquidity concerns.

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