2021 was a strong year for the construction sector, which witnessed a sharp upward trend after the government's real estate and construction amnesty announced in 2020. Investors and developers started various real estate and construction-related projects, and genuine buyers, particularly from overseas, took great interest in the sector, resulting in real economic activity. While this process had a positive impact on the economy overall, various challenges were also faced:
- A demand and supply gap was created for various construction materials
- Skilled labour and manpower issues were faced
- Scaffolding and shuttering witnessed severe shortages in the market
- Material prices increased
However, there were also many positives:
- New jobs were generated
- More opportunities opened up for labour and skilled personnel
- More activity was seen among construction material suppliers and vendors
- Local tile manufacturers saw more quality entrants
Getting back to the topic of the rising construction costs in 2021 — regular followers of ours will know we have been publishing yearly grey structure cost articles from 2017-2020, however a dedicated "latest grey structure cost 2021" video or article was not published, despite various requests, mainly because material prices were fluctuating on a weekly basis — it isn't possible to put together a detailed breakdown until prices settle for some time. Instead, here is a brief comparison of current grey structure cost against last year's cost. In our 2020 grey structure cost article we noted a figure of around Rs 1,400-1,450/sq.ft — currently this figure has risen to Rs 1,700-1,750/sq.ft, which is a striking 20% increase in the overall grey structure cost in the space of a few months. The cost stayed more or less the same until February-March this year — the sharp rise happened in the last few months, as key material items such as bricks, steel, cement and plumbing items all saw sharp increases. Below is an item-by-item comparison of the latest grey structure cost for 2021 against 2020.
Construction contract type: Labor rate contractConstruction grade: A grade compliance to all technical & engineering specifications
Sample project
10 Marla house construction cost (250 sq.yd)Covered area 3,400 sq.ft, including ground floor, first floor and rooftop mumty.Item wise per square foot cost calculations
Year 2020
Bricks 296 Rs/sq.ft
Calculation: 296 Rs x 3,400 sq.ft = 1,006,400 Rs — Brick price = 11.5 Rs per piece — Quantity = 87,513 bricks
Crush 67 Rs/sq.ft
Calculation: 67 Rs x 3,400 sq.ft = 227,800 Rs — Crush price = 78 Rs per c.ft — Quantity = 2,920 c.ft
Cement 175 Rs/sq.ft
Calculation: 175 Rs x 3,400 sq.ft = 595,000 Rs — Cement price = 540 Rs/50kg bag — Quantity = 1,101 bags
Steel 227 Rs/sq.ft
Calculation: 227 Rs x 3,400 sq.ft = 771,800 Rs — Steel price = 115 Rs/kg (115,000 Rs/ton) — Quantity = 6,711 kg, approx. 6.7 tons
Sand 45 Rs/sq.ft
Calculation: 45 Rs x 3,400 sq.ft = 153,000 Rs — Sand price = 32 Rs/c.ft — Quantity = 4,781 c.ft
Labor contractor 325 Rs/sq.ft
Calculation: 325 Rs x 3,400 sq.ft = 1,105,000 Rs
Steel fixer 13 Rs/sq.ft
Calculation: 13 Rs x 3,400 sq.ft = 44,200 Rs
Plumbing contractor 18 Rs/sq.ft
Calculation: 18 Rs x 3,400 sq.ft = 61,200 Rs
Electric contractor 15 Rs/sq.ft
Calculation: 15 Rs x 3,400 sq.ft = 51,000 Rs
Other items
Electricity items 35 Rs/sq.ft
Calculation: 35 Rs x 3,400 sq.ft = 119,000 Rs
Electric items include the complete uPVC conduit (pipes) required in walls, slabs and underground, along with internal switch board boxes and fittings for standard Chinese fittings, and the main distribution boxes for ground and first floor. Electric conduit saw a sharp price increase in 2019 compared to 2018.
Plumbing items 70 Rs/sq.ft
Calculation: 70 Rs x 3,400 sq.ft = 238,000 Rs
Plumbing items include complete PPRC pipes and fittings — elbows, bends, tees — required for water and gas connections, complete uPVC piping for sewerage and drain systems, and a typical 400-gallon plastic overhead water tank with GI steel pipe fittings. Plumbing conduit also saw a sharp price increase in 2019 compared to 2018.
Earth fill / Bharti 26 Rs/sq.ft
Calculation: 26 Rs x 3,400 sq.ft = 88,400 Rs
Earthfill considered here is for a normal plot around 2 ft deep from road level, which after completion of foundations up to DPC requires a maximum of 6 ft of earthfill. Where less earthfill is needed, this figure can come down.
Brick tile 12 Rs/sq.ft
Calculation: 12 Rs x 3,400 sq.ft = 40,800 Rs
Brick tile is required during water proofing and finishing of roof floors. The rate used here is up to 10 Rs per brick tile.
Guard salary 22 Rs/sq.ft
Calculation: 22 Rs x 3,400 sq.ft = 74,800 Rs
Guard salary is based on 15,000 Rs/month for a tenure of up to 5 months.
Brick ballast / Rorhi / Gravel 14 Rs/sq.ft
Calculation: 14 Rs x 3,400 sq.ft = 47,600 Rs
Bitumen 5 Rs/sq.ft
Calculation: 5 Rs x 3,400 sq.ft = 17,000 Rs
Polythene sheet 4 Rs/sq.ft
Calculation: 4 Rs x 3,400 sq.ft = 13,600 Rs
Mud 4 Rs/sq.ft
Calculation: 4 Rs x 3,400 sq.ft = 13,600 Rs
Chips aggregate 5 Rs/sq.ft
Calculation: 5 Rs x 3,400 sq.ft = 17,000 Rs
Taxes 6 Rs/sq.ft
Calculation: 6 Rs x 3,400 sq.ft = 20,400 Rs
Electricity bills 7 Rs/sq.ft
Calculation: 7 Rs x 3,400 sq.ft = 23,800 Rs
Water boring 6 Rs/sq.ft
Calculation: 6 Rs x 3,400 sq.ft = 20,400 Rs
Anti termite spray 7 Rs/sq.ft
Calculation: 7 Rs x 3,400 sq.ft = 23,800 Rs
Random expenditures 15 Rs/sq.ft
Calculation: 15 Rs x 3,400 sq.ft = 51,000 Rs
Year 2021
Bricks 360 Rs/sq.ft
Calculation: 360 Rs x 3,400 sq.ft = 1,224,000 Rs — Brick price = 14 Rs per piece — Quantity unchanged
Crush 67 Rs/sq.ft
Calculation: 67 Rs x 3,400 sq.ft = 227,800 Rs — Crush price = 78 Rs per c.ft — Quantity unchanged
Cement 220 Rs/sq.ft
Calculation: 220 Rs x 3,400 sq.ft = 748,000 Rs — Cement price = 680 Rs/50kg bag — Quantity unchanged
Steel 339 Rs/sq.ft
Calculation: 339 Rs x 3,400 sq.ft = 1,152,600 Rs — Steel price = 172 Rs/kg (172,000 Rs/ton) — Quantity unchanged
Sand 45 Rs/sq.ft
Calculation: 45 Rs x 3,400 sq.ft = 153,000 Rs — Sand price = 32 Rs/c.ft — Quantity unchanged
Labor contractor 350 Rs/sq.ft
Calculation: 350 Rs x 3,400 sq.ft = 1,190,000 Rs
Steel fixer 15 Rs/sq.ft
Calculation: 15 Rs x 3,400 sq.ft = 51,000 Rs
Plumbing contractor 20 Rs/sq.ft
Calculation: 20 Rs x 3,400 sq.ft = 68,000 Rs
Electric contractor 20 Rs/sq.ft
Calculation: 20 Rs x 3,400 sq.ft = 68,000 Rs
Other items
Electricity items 45 Rs/sq.ft
Calculation: 45 Rs x 3,400 sq.ft = 153,000 Rs
Electric conduit witnessed a sharp increase in prices in 2021 compared to 2019-20.
Plumbing items 85 Rs/sq.ft
Calculation: 85 Rs x 3,400 sq.ft = 289,000 Rs
Plumbing conduit also witnessed a sharp increase in prices in 2021 compared to 2019-20.
Earth fill / Bharti 26 Rs/sq.ft
Calculation: 26 Rs x 3,400 sq.ft = 88,400 Rs
Earthfill considered here is for a normal plot around 2 ft deep from road level, which after completion of foundations up to DPC requires a maximum of 6 ft of earthfill. Where less earthfill is needed, this figure can come down.
Brick tile 12 Rs/sq.ft
Calculation: 12 Rs x 3,400 sq.ft = 40,800 Rs
Brick tile is required during water proofing and finishing of roof floors. The rate used here is up to 10 Rs per brick tile.
Guard salary 25 Rs/sq.ft
Calculation: 25 Rs x 3,400 sq.ft = 85,000 Rs
Guard salary is based on 17,000 Rs/month for a tenure of up to 5 months.
Brick ballast / Rorhi / Gravel 14 Rs/sq.ft
Calculation: 14 Rs x 3,400 sq.ft = 47,600 Rs
Bitumen 5 Rs/sq.ft
Calculation: 5 Rs x 3,400 sq.ft = 17,000 Rs
Polythene sheet 5 Rs/sq.ft
Calculation: 5 Rs x 3,400 sq.ft = 17,000 Rs
Mud 4 Rs/sq.ft
Calculation: 4 Rs x 3,400 sq.ft = 13,600 Rs
Chips aggregate 5 Rs/sq.ft
Calculation: 5 Rs x 3,400 sq.ft = 17,000 Rs
Taxes 6 Rs/sq.ft
Calculation: 6 Rs x 3,400 sq.ft = 20,400 Rs
Electricity bills 10 Rs/sq.ft
Calculation: 10 Rs x 3,400 sq.ft = 34,000 Rs
Water boring 6 Rs/sq.ft
Calculation: 6 Rs x 3,400 sq.ft = 20,400 Rs
Anti termite spray 15 Rs/sq.ft
Calculation: 15 Rs x 3,400 sq.ft = 51,000 Rs
Random expenditures 20 Rs/sq.ft
Calculation: 20 Rs x 3,400 sq.ft = 68,000 Rs
| # | Item | 2020 (Rs/sq.ft) | 2021 (Rs/sq.ft) |
|---|---|---|---|
| 1 | Bricks | 296 | 360 |
| 2 | Crush | 67 | 67 |
| 3 | Cement | 175 | 220 |
| 4 | Steel | 227 | 339 |
| 5 | Sand | 45 | 45 |
| 6 | Labor contractor | 325 | 350 |
| 7 | Steel fixer | 13 | 15 |
| 8 | Plumbing contractor | 18 | 20 |
| 9 | Electric contractor | 15 | 20 |
| 10 | Electricity items | 35 | 45 |
| 11 | Plumbing items | 70 | 85 |
| 12 | Earth fill / Bharti | 26 | 26 |
| 13 | Brick tile | 12 | 12 |
| 14 | Guard salary | 22 | 25 |
| 15 | Brick ballast / Rorhi / Gravel | 14 | 14 |
| 16 | Bitumen | 5 | 5 |
| 17 | Polythene sheet | 4 | 5 |
| 18 | Mud | 4 | 4 |
| 19 | Chips aggregate | 5 | 5 |
| 20 | Taxes | 6 | 6 |
| 21 | Electricity bills | 7 | 10 |
| 22 | Water boring | 6 | 6 |
| 23 | Anti termite spray | 7 | 15 |
| 24 | Random expenditures | 15 | 20 |
| Total | 1,419 | 1,719 |
Disclaimer
- A possible ±5% variation is expected in the costs shown
- Rates applicable on brick structures only
- Add Rs 150-200/sq.ft for frame structure construction
- Achieving this cost requires: past construction experience, quality & honest labour, labour management skills, and quality, timely & cost-effective material procurement
- Factors such as construction inexperience, unusual covered areas, frequent wear & tear, or fraudulent labour can affect this cost figure
- Hiring a professional company will add a minimum margin of around Rs 200/sq.ft