Contents
- 1. Average cost of construction in India (Dec 2022)
- 2. Plot layout for house construction
- 3. Regulatory laws and norms
- 4. How do you calculate construction costs?
- 4.1. Civil cost
- 4.2. Finishing cost
- 5. Types of construction raw materials and their costs
- 6. Impact of macro factors on construction costs
- 7. How to reduce construction costs?
While housing units in a gated community offer a plethora of amenities and facilities, they are generally not tailor-made. Therefore, many people prefer independent home constructions as it allows them to customise their abode as per their liking and convenience. However, the development of a house involves particular challenges. It requires immense patience and detailed construction estimates to avoid mismanagement of funds. Generally, homeowners are either unaware or negligent about the development cost. Consequently, several challenges may arise, varying from cost-escalation to sub-standard construction quality. To help with the process, 99acres has collated the necessary points to consider while arriving at the average cost of constructing a house in India.
Average cost of construction in India (Dec 2022)
| Expenses | Average Expenditure for a 1,000 sq ft home |
|---|
| Architect | Rs 15,000 onwards |
| Brick wall construction (without RCC) | Rs 800 per sq ft |
| Brick wall construction with RCC) | Rs 900 per sq ft |
| Civil work | Rs 1,500 per sq ft |
| Electrician/Plumber | Rs 2,500 per sq ft |
| Raw material cost | Rs 7 lakh onwards |
Source: Secondary sources
On average, building a 1,000 sq ft house in India can cost you Rs 12 lakh. This may vary as per the city and other factors such as labour availability, raw material supply and quality of furnishing you are using.
Plot layout for house construction
The first step in constructing a house is the layout of the plot. Here, an architect or a designer creates a design plan for the designated plot. Generally, a layout drawing includes the rooms, kitchen, lavatories, stairs, terrace, balconies, storage area, parking and any other space you may wish to add. However, in exchange for the services offered, the architect or the design engineer charges a fee, which is dependent on the size of the plot.
For instance, if the plot size is 1,000 sq ft, the architect may charge between Rs 15,000 and Rs 20,000. However, the rates may differ across locations, albeit marginally.
Regulatory laws and norms
The building regulations vary across locations and may increase the project deadline and construction cost. For instance, if your land is in an ecologically sensitive location, you have to approach the municipal body or the gram panchayat under whose jurisdiction your property is located and seek construction permission. This may result in cost overruns and delayed project deadlines.
Also, some cities have strict development rules that should be duly observed to get approvals. For instance, if you are planning to build a two-floor house in Delhi, it is crucial to have stilt parking. In case your building plan does not have this provision, the municipal body would reject the plan.
How do you calculate construction costs?
According to Rituraj Verma, Partner, Nisus Finance, “The construction cost of a house depends on two things - civil work and the finishing work. While the civil work includes the structure of the house, the finishing work entails doors, windows, wooden cupboards, flooring, roofing, wall designs, and painting.
Holistically, the construction costs vary from Rs 1,000 sq ft to Rs 5,000 per sq ft, depending upon the city and construction site.
Civil cost
The civil cost majorly incorporates the cost of raw materials used in the construction of plinth, walls, roof, boundary wall, parfait, floor work and plastering. The raw materials majorly include bricks, cement, concrete, sand, and RCC reinforced steel, among others. However, stating the quantum of raw materials is usually difficult as it largely depends on the design of the structure. Moreover, shuttering, contractor, and labour charges are also a part of the civil cost.
Note - Hire a contractor with experience in the field of construction. Civil construction involves several challenges, and there could be a situation where the contractor is required to take prompt decisions. Thus, the experience would make things easier and hassle-free.
Typically, the cost of brick wall construction without RCC column differs from Rs 800 per sq ft to Rs 900 per sq ft. On the contrary, the brick wall construction with RCC column ranges from Rs 900 per sq ft to Rs 1,000 per sq ft.
Finishing cost
As mentioned above, finishing work comprises doors, windows, wooden work, electric fitting, sanitary fittings, pop work and grillwork. The finishing cost usually varies from Rs 500 per sq ft to Rs 3,000 per sq ft, subject to the amenities involved.
Normal finishing work with grey flooring starts from Rs 500 per sq ft and goes up to 700 per sq ft. However, medium finish work that includes tiles or local wooden floor work ranges from Rs 1,000 per sq ft to 1,200 per sq ft. In case you prefer premium finishing along with teakwood floor then the cost may differ from Rs 1,500 per sq ft to Rs 3,000 per sq ft.
Kuntal Vyas Aggrawal, Director, Resaiki
Moreover, finishing costs also involve labour, such as electrician, plumber, tile mason, carpenter, painter and polisher. Largely, the construction cost of a house is the cost of civil work, along with the finishing costs. Therefore, the average construction cost of a 1,000 sq ft home may differ from about Rs 1,300 per sq ft to Rs 5,000 per sq ft, shares Kuntal.
In most cases, construction cost estimates are provided by architects, contractors, or other specialist estimating firms. However, when it comes to self-estimation, an essential factor is the quality of materials used for the construction.
Types of construction raw materials and their costs
The construction raw materials are divided into three classes, i.e. C, B, and A.
- C Class: Involves construction with low-grade bricks/sand, cheapest fixtures, and low-quality cement gradesand steel. Usually, it takes around Rs 7-8 lakh to construct a C-class house measuring 1,000 sq ft.
- B Class: Such type of construction involves medium-quality raw materials, ranging from cement to steel and fixtures and fittings. Contrary to C class, a house measuring 1,000 sq ft built with B class materials would take Rs 10-11 lakh to complete.
- A Class: Such type of construction involves using the best resource quality, and therefore, the cost of constructing a house measuring 1,000 sq ft may vary between Rs 15 lakh and Rs 25 lakh.
Furthermore, the construction cost may also be influenced by external factors, such as:
- Construction delays owing to the non-professional attitude of the contractor, labour strikes, or holidays
- Increased rental costs of the building equipment
- Inefficient use of equipment that results in overhead costs
- A rise in the material prices
- A rise in the labour charges
Though the situations mentioned above may or may not arise, it is always better to be prepared for unforeseen challenges and plan a budget accordingly to ensure a hassle-free construction process. Experts advise keeping the flexibility of 15-20 percent of the overall construction cost for any unpredictable circ*mstances in the process. Also, homeowners must take the Goods and Services Tax (GST) on construction materials into account, while calculating their costs.
Impact of macro factors on construction costs
The COVID-19 pandemic and the Ukraine-Russia crisis have significantly escalated the construction costs in India. Rising fuel prices, shortage of construction labour and expensive crucial input materials such as steel, cement, stone, and plywood material, have contributed to an increase of up to 25 percent in the average cost of constructing a house in India. With crude oil going up to USD 96 per barrel, the cost of transportation has been a key factor in the rising cost of construction in India.
Although the process of home construction may seem lengthy, involving minute planning of costs and resources, it is highly recommended to break down the requisites of home construction to avoid unforeseen expenses during the actual project execution.
How to reduce construction costs?
Here are a few tips that can be helpful in reducing the overall construction cost in India:
- Source material locally. Be it cement, bricks and blocks, doors and windows, tiles, bathroom fittings or pipes- opt for locally available material. You will save a lot on transportation costs.
- Factor in the Goods & Services Tax while calculating the construction cost. Building materials attract around 28 percent taxation which can shoot up your overall construction cost.
- Think long-term. Use good quality building materials to avoid frequent repair and maintenance costs. You can also use greener alternatives to save costs in the future. You can consider a time frame of 30-50 years.
- Consult multiple contractors and get estimates before hiring anyone. This would help you to understand the market rates and bargaining power you hold. If you are providing the construction material, you can control the labour cost by employing fewer or multiple people at a time.
The process of constructing a house may seem like a lengthy process, requiring immense physical and mental bandwidth. However, this may work wonders for homeowners who wish to live in a space designed as per their needs and requirements. Also, with scrutiny of raw materials and prices on a regular basis, your home is likely to have excellent quality and require lesser repair work in the long run. Nonetheless, it is recommended to seek professional assistance to ensure that each step of the construction is performed appropriately, without any lapses.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. 99acres does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
FAQs
Average cost of construction in India (Dec 2022)
On average, building a 1,000 sq ft house in India can cost you Rs 12 lakh. This may vary as per the city and other factors such as labour availability, raw material supply and quality of furnishing you are using.
Are construction costs going up 2022? ›
According to industry experts, the national average cost of construction projects is set to rise throughout 2022.
What is the construction cost in 2022? ›
The construction cost in Bangalore real estate in 2022 would range from Rs 1650 per square foot to Rs 1900 per square foot.
How much have building materials increased in 2022? ›
In July 2022, the year-over-year change in materials and components for construction, excluding capital investment, labor, and imports was 14.8%. The growth rate of increase is down, which is good, but price increases are cumulative, so even lower growth means prices keep getting higher.
Will construction costs go down in 2022 in India? ›
With wholesale price inflation (WPI) and material cost, both seeing a double-digit rise, the cost of construction can rise by a further 8-9% by December 2022,” said Ramesh Nair, CEO, India & Managing Director, Market Development, Asia, Colliers.
Is it cheaper to build than buy 2022? ›
But building a house is still more expensive than buying one. Existing home prices are 15% higher in 2022 than last year. But building material costs have gone up 19%. And thanks to inflation, builders are also paying more for other things they need to build houses, like workers, fuel and marketing.
Will construction costs fall in 2022? ›
Like many sectors, the construction industry will not go unscathed. 2022 has seen a continual rise in construction material costs and the most recent Building Materials & Components Index reported a 16.7% increase for “All Work” for September 2022 year on year.
Will construction material prices drop in 2022? ›
As per Colliers initial estimates, the cost of construction was likely to rise by a further 8-9% by the end of 2022.
Will construction material costs go down in 2022? ›
Will construction costs go down in 2022? The short answer is that it's not likely to happen. It was predicted by many economists in 2021 that the overall economy would have a slow recovery and that a housing crash could occur.
Is 2022 a good year to build? ›
Barring any unforeseen calamities, 2022 could be a good year for homebuilders and buyers. However, the effects of inflation, new COVID variants, or other market disruptions could change everything.
Therefore, CBRE forecasts a marginal rise in the overall construction costs during 2023 across cities, with Mumbai likely to witness a sharper rise. However, strong demand for construction is likely to continue to push up employment in the construction sector.
What will happen to construction in 2022? ›
LaborIQ predicts a 3.9% growth in construction jobs in 2022 and also predicts a commensurate 3.9% median wage growth in construction jobs and, in some metropolitan regions, even wage growth of over 4.5%.
Will construction prices go down in 2023? ›
With these factors in mind, it is likely that we will see higher home construction costs in 2023. Custom home builders are having to pay more for labor and materials, requiring them to increase their prices. As a result, home construction costs are unlikely to fall after the new year.
Will cement prices come down in 2022? ›
All-India average cement price was down 4% MoM in Mid-June 2022. Prices in the North were impacted due to lower demand whereas prices in the East were hit by rising competition. Robust demand in the West supported prices.
...
| Region | Price Decline |
|---|
| West | -0.90% |
| All India | -4.00% |
4 more rows14 Jun 2022
5 Reasons why 2023 is a good time to build your forever home. As stability returns (Less Price Increases & More Product Availability) to the housing market in 2023 it will greatly improve the homebuilding experience without the rapid price increases and supply chain issues that have been normal over the past two years.
Will construction costs go down in 2024? ›
Soaring costs for construction materials likely won't plateau until 2024, industry experts tell Construction Dive. With inflation and lingering supply chain issues acting as aggravating factors, some experts believe prices could go up between 9% and 12% by the end of the year.
Which month is best for construction of house in India? ›
In India, The best season or seasons for constructions would be post monsoon followed by winter i.e., from September to March. The quality of houses built post monsoon or in winter will have an edge over houses built in summer and during monsoon. From the Month September to March usually there are No Rains in India.
Will construction costs ever go down? ›
Some people buy more materials on any dip, fearing prices will quickly return to their all-time highs. Experts have cited several headwinds such as rising interest rates and declining demand for residential construction that can lower overall construction prices in 2022.
Should I buy or build a house in 2022? ›
Is it cheaper to build or buy a house? As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home. The median cost of new construction was $449,000 in May 2022.
Will construction slow down in 2023? ›
Total U.S. construction starts will drop 3% when adjusted for inflation to clock in at $1.08 trillion next year, according to the 2023 Dodge Construction Outlook.
Our guide for When Should I Buy A Home says yes – December 2022 is a good time to buy. Here's why first-time buyers should jump back into the market: Mortgage rates made the largest one-month drop since 14 years ago. There are fewer homes available to purchase in most U.S. markets.
What is the future of construction costs? ›
The National Home Builders Association says increasing prices could cause the cost of an average new single-family home to increase by more than $18,600 in 2022.
How is the construction industry doing 2022? ›
Employment in the United States construction industry has been on the rise. Over the last 12-month period, leading to July 2022, employment has increased significantly. According to a report from the Bureau of Labor Statistics, industry employment increased by 311,000 jobs or 4.2% on a year-over-year basis.
Will construction costs go down in India? ›
YoY change in average cost of construction
With wholesale price inflation (WPI) and material cost, both seeing a double-digit rise, the cost of construction can rise by a further 8-9% by December 2022,” said Ramesh Nair, CEO, India & Managing Director, Market Development, Asia, Colliers.
Is there a shortage of building materials 2022? ›
When will the materials shortage end? Not yet. According to the CLC, pressures on global shipping, including delays and volatile prices, look set to continue well into 2022.
Is now the right time to build a house? ›
In fact, it's estimated that the price of residential construction will keep rising. To get the best price possible, 2022 might be the best time to build a house.
Are building materials going up in April 2022? ›
Chart 6: Seasonally Adjusted Deliveries of Bricks, GB
There was a 3.4% increase in brick deliveries in April 2022 compared to April 2021, according to the seasonally adjusted figures. This followed a 1.0% decrease in March 2022, compared to March 2021. The month-on-month change shows a 1.7% decrease in April 2022.
Should I wait to build in 2023? ›
Interest rates and building costs are not forecasted to decrease into 2023, and could even continue rising. The market is volatile and world events are unpredictable, so it is likely that building sooner could save you money in the long run.
Which month is good for house construction 2022? ›
Good days to start house construction in 2022
| Date | Solar month | Note this before construction |
|---|
| April 14 | Baisakh | Good time for north or south-facing homes |
| May 14 | Jeth | Good time for north or south-facing homes |
| June 14 | Ashadha | Avoid construction |
| July 14 | Shravan | Good time for east or west-facing house |
8 more rows21 Nov 2022
Shipping Container Home
The cheapest type of house to build in 2022 is a shipping container one. Living in a shipping container may not sound like the ideal situation on the surface, but shipping container homes have become more popular in recent years.
Despite housing prices expected to drop in 2023, it will become more expensive to purchase a home. According to a new projection from Freddie Mac, the for-sale cost of a home is expected to drop . 2% in 2023.
What will happen to house prices in 2024? ›
However the OBR predicts there will still be an increase of 10.7% in house prices this year, followed by a decrease of 1.2% in 2023 and one of 5.7% in 2024. After this the OBR expects prices to rise again, by 1.2% in 2025, 3% in 2026 and 3.5% in 2027.
Will house prices be cheaper in 2023? ›
House prices are expected to fall across the board as mortgage rates skyrocketed this summer, but not all properties will feel the crunch in the same way, says Hina Bhudia.
Is there a concrete shortage 2022? ›
The concrete shortage is showing no signs of letting up anytime soon, which will mean continued delays for major construction projects and personal home improvements alike. Copyright 2022 WPTA.
Will construction slow down? ›
On net, manufacturing construction will slow in 2023 and 2024. The next largest category is office construction, which has held up surprisingly well. Some of the continued activity is large, multi-year projects that are being completed in a weaker market, but in some areas suburban offices are going up.
Is the construction industry growing 2022? ›
Driving growth as challenges and competition increase
The US engineering and construction industry began 2022 on a bright note after achieving strong growth of 8% in construction spending in 2021.
What will house prices do 2023? ›
Against this backdrop, estate agents Savills and Knight Frank expect house prices to drop by 10% and 5% respectively in 2023. Economic experts Capital Economics are forecasting that in quarter four house prices will be 8.5% lower than they were in Q4 2022.
Are cement prices falling? ›
Cement and concrete prices have continued to climb recently, reflecting higher production costs, which were up about 14% year-over-year in the third quarter of 2022, according to a report on material pricing and supply chain volatility by Linesight, an Ireland-based global construction consultant.
What is the future of cement? ›
The consumption of cement in India is expected grow to at a CAGR of 5.68% from FY16 to FY22. As per Crisil Ratings, the Indian cement industry is likely to add ~80 million tonnes (MT) capacity by FY24, the highest since the last 10 years, driven by increasing spending on housing and infrastructure activities.
Will cement prices come down? ›
Cement prices are declining in most markets due to the monsoon, according to a research report by Jeffries. The all-India average prices are currently below the January 2022 average, when the cost pressure was less.
Based on Feng Shui, the best months in 2023 to start building or buying a house in the Philippines are August, September, and October and the best days are 3, 7, 11, 20, 24, 27, and 29.
Is it worth building a house in 2022? ›
Yes 2022 can still be a good time to build your custom forever home, despite rising costs and interest rates. Building your custom home is an investment in your family's lifestyle and should be looked at as a long term financial & lifestyle decision of living in your forever home for 5 or more years.
Is it better to buy or build 2022? ›
Is it cheaper to build or buy a house? As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home. The median cost of new construction was $449,000 in May 2022.
Will construction costs go down in 2023? ›
With these factors in mind, it is likely that we will see higher home construction costs in 2023. Custom home builders are having to pay more for labor and materials, requiring them to increase their prices. As a result, home construction costs are unlikely to fall after the new year.
Is 2023 a good year to build a house? ›
5 Reasons why 2023 is a good time to build your forever home. As stability returns (Less Price Increases & More Product Availability) to the housing market in 2023 it will greatly improve the homebuilding experience without the rapid price increases and supply chain issues that have been normal over the past two years.
Will building material prices go down in 2022? ›
In July 2022, the year-over-year change in materials and components for construction, excluding capital investment, labor, and imports was 14.8%. The growth rate of increase had dropped, but that has changed. The August figures show that combined materials and components in construction were up 15.2% year over year.
Will concrete prices go down in 2022? ›
It is forecasted that the price of cement will increase by a further 7.7% in the second half of 2022.
What time of year is cheapest to build a house? ›
While spring is an ideal time to start building a home, the fall and winter months are usually when building materials and construction costs are lowest because there is less demand.
Are building costs decreasing? ›
The National Association of Home Builders is reporting a decline in construction building material prices. The National Association of Home Builders (NAHB) has reported that the price of building materials has declined 2.3% since June, the largest drop since April 2020.
How to save money building a house in 2022? ›
We've put together our top six ways to build your house, keep the costs low and save a ton of money in the process.
- Don't Use a Contractor. Don't get us wrong. ...
- Go Tiny. ...
- Use Reclaimed Building Material. ...
- Get as Much Done Cheaply or for Free. ...
- Keep the Design Simple. ...
- Skip the Fancy Finishes – For Now.
There is no guarantee that interest rates will remain low, especially as the world recovers from the pandemic. That makes 2022 a good year to invest in real estate and take advantage of the low rates before they change.
What is the lucky month to build a house? ›
Based on Feng Shui, the best months in 2023 to start building or buying a house in the Philippines are August, September, and October and the best days are 3, 7, 11, 20, 24, 27, and 29.
