Sudden increase in House construction costs in Pakistan in 2021

Sudden increase in House construction costs in Pakistan in 2021

Year 2021 has been a good year for construction sector that witnessed sharp upwards trend. This happened after the Imran Khan led government announced real estate/construction amnesty back in 2020. Investors and developers started various real estate and construction related projects and genuine buyers specially from overseas took great interest in this sector that resulted in economic activity. Although this process as a whole had a positive impact on the economy but there were various challenges faced such as:

  1. Demand and supply gap was created for various construction materials
  2. Skilled labor/manpower issue was faced
  3. Scaffolding and shuttering witnessed severe shortage in market
  4. Material prices increase

However there were many positives that happened but some highlights are:

  1. New jobs were generated
  2. More opportunities for labor and skilled personals
  3. More activities in construction material related suppliers/vendors
  4. Local tile manufactures witnessed more quality entrants

Lets get back to our topic of increase in construction costs in 2021, those who are our regular followers/subscribers must know that we have been uploading yearly Grey structure cost videos from 2017 – 2020, however Latest grey structure cost 2021 video or article was not posted on our official youtube channel and blogs section of our website though we had various requests, the main reason for not uploading Latest grey structure cost 2021 is the material price fluctuation on weekly basis. It is not possible to make a detailed video until the prices get stable for some time. However we will do a brief comparison of current grey structure cost with last year’s cost. If you go through our 2020 grey structure cost video we mentioned that the figure was around 1400-1450 Rs/sqft, currently this figure has gone up-to 1700-1750 Rs/sqft which is really alarming that only in last 3-4 months, material prices have gone so much upwards that the overall grey structure cost witnessed 20% increase. The cost was more or less almost same uptil Feb-March this year, it all happened suddenly in last 3 months when main material items such as Bricks, steel, cement and plumbing items witnessed sharp increase. Below we will do an item by item comparison to see Latest grey structure cost 2021:

Construction contract type: Labor rate contract

Construction grade: A grade compliance to all technical & engineering specifications

 

Sample project

10 Marla house construction cost (250 sq.yd)

Covered area 3400 sq.ft including

  • Ground floor,
  • first floor and
  • rooftop mumty.

YEAR 2020

Item wise per square foot cost calculations

Bricks 296 Rs/sq.ft

Calculation:

245 Rs x 3400 sq.ft=1006400 Rs

Brick price           =11.5 Rs per piece

Quantity              =1006400/11.5 = 87513 bricks

Crush 67 Rs/sq.ft

Calculation:

67 Rs x 3400 sq.ft=227800 Rs

Crush price       =78 Rs per c.ft

Quantity         =227800/78 = 2920 c.ft

Cement 175 Rs/sq.ft

Calculation:

175 Rs x 3400 sq.ft=595000 Rs

Cement price       =540 Rs/50kg bag

Quantity              =595000/540 = 1101 bags

Steel 227 Rs/sq.ft

Calculation:

227 Rs x 3400 sq.ft=771800 Rs

Steel price             =115 Rs/kg or 115000 Rs/ton

Quantity              =771800/115 = 6711 kg or 6.7 tons

Sand 45 Rs/sq.ft

Calculation:

45 Rs x 3400 sq.ft=153000 Rs

Sand price         =32 Rs/c.ft

Quantity             =153000/32 = 4781 c.ft

Labor contractor 325 Rs/sq.ft

Calculation:

325 Rs x 3400 sq.ft = 1105000 Rs

Steel fixer 13 Rs/sq.ft

Calculation:

13 Rs x 3400 sq.ft = 44200 Rs

Plumbing contractor 18 Rs/sq.ft

Calculation:

18 Rs x 3400 sq.ft = 61200 Rs

Electric contractor 15 Rs/sq.ft

Calculation:

15 Rs x 3400 sq.ft = 51000 Rs

Other items

Electricity items 35 Rs/sq.ft

Calculation:

35 Rs x 3400 sq.ft= 119000 Rs

Electric items include complete uPVC conduit (pipes) required in walls, slabs, underground etc. It also includes complete switch boards internal boxes fittings required for standard Chinese fittings. Main DB (Distribution boxes) are also included in these figures for ground and first floor. Electric conduit witnessed a sharp increase in prices in 2019 as compared to 2018.

Plumbing items 70 Rs/sq.ft

Calculation:

70 Rs x 3400 sq.ft= 238000 Rs

Plumbing items include complete PPRC pipes and its fittings such as elbows, bends, T’s etc required for water and gas connections. It also includes complete uPVC piping for sewerage and drain systems. It also includes a typical and standard 400 gallons plastic overhead water tank with GI (steel) pipes fitting. Plumbing conduit witnessed a sharp increase in prices in 2019 as compared to 2018.

Earth fill/Bharti 26 Rs/sq.ft

Calculation:

26 Rs x 3400 sq.ft= 88400 Rs

Earthfill considered in this costing is for a normal plot that is around 2 ft deep from road level and after completion of foundations till DPC requires maximum of 6ft deep earthfill. Incase of less earthfill this figure can go down.

Brick Tile 12 Rs/sq.ft

Calculation:

12 Rs x 3400 sq.ft= 40800 Rs

Brick tile is required during the process of water proofing and finishing the floor of roofs. Brick tile considered in this cost is up to 10 Rs/bricktile.

Guard Salary 22 Rs/sq.ft

Calculation:

22 Rs x 3400 sq.ft= 74800 Rs

Guard salary has been considered on basis of 15000 Rs/month for a tenure of 5 months maximum.

Brick Ballast/Rorhi/Gravel 14 Rs/sq.ft

Calculation:

14 Rs x 3400 sq.ft= 47600 Rs

Bitumen 5 Rs/sq.ft

Calculation:

5 Rs x 3400 sq.ft= 17000 Rs

Polythene sheet 4 Rs/sq.ft

Calculation:

4 Rs x 3400 sq.ft= 13600 Rs

Mud 4 Rs/sq.ft

Calculation:

4 Rs x 3400 sq.ft= 13600 Rs

Chips Aggregate 5 Rs/sq.ft

Calculation:

5 Rs x 3400 sq.ft= 17000 Rs

Taxes 6 Rs/sq.ft

Calculation:

6 Rs x 3400 sq.ft= 20400 Rs

Electricity bills 7 Rs/sq.ft

Calculation:

7 Rs x 3400 sq.ft= 23800 Rs

Water boring 6 Rs/sq.ft

Calculation:

6 Rs x 3400 sq.ft= 20400 Rs

Anti termite spray 7 Rs/sq.ft

Calculation:

7 Rs x 3400 sq.ft= 23800 Rs

Random expenditures 15 Rs/sq.ft

Calculation:

15 Rs x 3400 sq.ft= 51000 Rs

Total Grey structure cost in 2020

Rs 1419 per sqft

YEAR 2021

Item wise per square foot cost calculations

Bricks 360 Rs/sq.ft

Calculation:

360 Rs x 3400 sq.ft=1,224,000 Rs

Brick price           =14 Rs per piece

Quantity = Same

Crush 67 Rs/sq.ft

Calculation:

67 Rs x 3400 sq.ft=227800 Rs

Crush price       =78 Rs per c.ft

Quantity         = Same

Cement 220 Rs/sq.ft

Calculation:

220 Rs x 3400 sq.ft=748,000 Rs

Cement price       =680 Rs/50kg bag

Quantity              = Same

Steel 339 Rs/sq.ft

Calculation:

339 Rs x 3400 sq.ft=1,152,600 Rs

Steel price             =172 Rs/kg or 172000 Rs/ton

Quantity              = Same

Sand 45 Rs/sq.ft

Calculation:

45 Rs x 3400 sq.ft=153000 Rs

Sand price         =32 Rs/c.ft

Quantity             = Same

Labor contractor 350 Rs/sq.ft

Calculation:

350 Rs x 3400 sq.ft = 1,190,000 Rs

Steel fixer 15 Rs/sq.ft

Calculation:

15 Rs x 3400 sq.ft = 51000 Rs

Plumbing contractor 20 Rs/sq.ft

Calculation:

20 Rs x 3400 sq.ft = 68000 Rs

Electric contractor 20 Rs/sq.ft

Calculation:

20 Rs x 3400 sq.ft = 68000 Rs

Other items

Electricity items 45 Rs/sq.ft

Calculation:

45 Rs x 3400 sq.ft= 153000 Rs

Electric items include complete uPVC conduit (pipes) required in walls, slabs, underground etc. It also includes complete switch boards internal boxes fittings required for standard Chinese fittings. Main DB (Distribution boxes) are also included in these figures for ground and first floor. Electric conduit witnessed a sharp increase in prices in 2021 as compared to 2019-20.

Plumbing items 85 Rs/sq.ft

Calculation:

85 Rs x 3400 sq.ft= 289000 Rs

Plumbing items include complete PPRC pipes and its fittings such as elbows, bends, T’s etc required for water and gas connections. It also includes complete uPVC piping for sewerage and drain systems. It also includes a typical and standard 400 gallons plastic overhead water tank with GI (steel) pipes fitting. Plumbing conduit witnessed a sharp increase in prices in 2021 as compared to 2019-20.

Earth fill/Bharti 26 Rs/sq.ft

Calculation:

26 Rs x 3400 sq.ft= 88400 Rs

Earthfill considered in this costing is for a normal plot that is around 2 ft deep from road level and after completion of foundations till DPC requires maximum of 6ft deep earthfill. Incase of less earthfill this figure can go down.

Brick Tile 12 Rs/sq.ft

Calculation:

12 Rs x 3400 sq.ft= 40800 Rs

Brick tile is required during the process of water proofing and finishing the floor of roofs. Brick tile considered in this cost is up to 10 Rs/bricktile.

Guard Salary 25 Rs/sq.ft

Calculation:

25 Rs x 3400 sq.ft= 85000 Rs

Guard salary has been considered on basis of 17000 Rs/month for a tenure of 5 months maximum.

Brick Ballast/Rorhi/Gravel 14 Rs/sq.ft

Calculation:

14 Rs x 3400 sq.ft= 47600 Rs

Bitumen 5 Rs/sq.ft

Calculation:

5 Rs x 3400 sq.ft= 17000 Rs

Polythene sheet 5 Rs/sq.ft

Calculation:

5 Rs x 3400 sq.ft= 17000 Rs

Mud 4 Rs/sq.ft

Calculation:

4 Rs x 3400 sq.ft= 13600 Rs

Chips Aggregate 5 Rs/sq.ft

Calculation:

5 Rs x 3400 sq.ft= 17000 Rs

Taxes 6 Rs/sq.ft

Calculation:

6 Rs x 3400 sq.ft= 20400 Rs

Electricity bills 10 Rs/sq.ft

Calculation:

10 Rs x 3400 sq.ft= 34000 Rs

Water boring 6 Rs/sq.ft

Calculation:

6 Rs x 3400 sq.ft= 20400 Rs

Anti termite spray 15 Rs/sq.ft

Calculation:

15 Rs x 3400 sq.ft= 51000 Rs

Random expenditures 20 Rs/sq.ft

Calculation:

20 Rs x 3400 sq.ft= 68000 Rs

Total Grey structure cost in 2021

Rs 1719 per sqft

Disclaimer:

-Possible ±5% Variation is possible in cost shown in video
-Rates applicable on Brick structures only
-Add Rs 150-200 for frame structure construction
-Skills required to achieve this cost:
-Past construction experience
-Quality & honest labor
-Labor management skills
-Quality, timely & cost effective material procurement
-Factors such as construction inexperience, unusual
covered areas, frequent wear & tears, fraudulent labor
etc can effect this cost figure
-Hire professional company which will add a figure of 200 Rs/sq.ft
minimum as margin.

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About The Author

Mohsin Munir
Holding a degree in BS EE (Electrical engineering) and astounding knowledge of house construction business since 2010, wide experience and relevant expertise in the construction business. Believe in research based strategy while holding a distinguished position in the construction market. Started at a small scale in 2010 and recognised among the top builders and contractors in Pakistan now, especially among the expatriates and overseas Pakistanis who always trusted in our commitment and services.

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