If you are planning to build a house this season, you will have to increase your budget as construction has increased by around 20 percent compared to last year.

Civil engineers say double-digit increment in price of major construction materials -- sand, aggregates, bricks, steel and wood - as well as rise in labor cost has sent construction cost soaring.

“A four-room home could be built with Rs 2 million last year. Now, people need to around Rs 500,000 more to build similar home. This is mainly because of the rise in the price of construction materials,” said Rupesh Simkhada, a civil engineer.

Simkhada, who recently supervised construction of a one-story home spread over 800 sq ft in Tokha, said construction cost climbed to Rs 2.3 million from estimated Rs 1.8 million.

Umesh Bhatta of Nepalgunj is searching for additional fund as the estimated budget of Rs 2.5 million became insufficient for his four-room house which is under construction.
Soaring price of construction materials and rise in labor cost over the past year have put a dent on wallets of people who are building their homes this season.

Steel, which hold 29 percent share on total construction cost according to engineers, has become dearer by Rs 500 to Rs 8,500 per quintal.

“Price of imported raw materials, including ore, depends on the value of dollar. If US dollar strengthens, we have no option but to jack up the price,” Bishwo Jay Pudasaini, manager of Panchakanya Steels, told Republica.

Similarly, bricks have become dearer by as much as Rs 1,000 per 1,000 units.

Umesh Osthi, a contractor who is undertaking construction of a house at Teku, said price of bricks have climbed to Rs 8,500 pr 1,000 units compared to last year"s Rs 7.500.
Mahendra Bahadur Chitrakar, president of Nepal Brick Industry Association, said they had to increase price due to power cuts which increased their operating cost.

Over the past year, price of cement, which holds 29 percent share in total construction cost, increased by as much as Rs 40 per sack (50 kg). Jagadamba OPC cement, which was available at Rs 610 per sack, now costs Rs 650 per sack. Similarly, price of Shivam OPC cement has increased by Rs 25 to Rs 675 per sack.

Wood, which is used to make doors and windows, has become dearer by Rs 700 per cu ft to Rs 5,800 per cu ft. Furniture Point, Putalisadak is selling Sisau and Sal wood for Rs 5,000 and Rs 5,800 per cu ft, respectively, up by Rs 1,000 cu ft compared to last year.

Supply of wood in the market has dropped after the government tightened collection of timber from forests.

Similarly, aggregates, which were available at Rs 46- 47 per cu ft a year ago, now cost Rs 51 per cu ft. Rise in wage of laborers is the other factor that has increased construction cost.

“A couple of years ago, laborers were easily available at an average of Rs 400 per day (eight hours). Now it is difficult to find laborers even at Rs 650 per day,” said Osthi.

According to contractors, increasing exodus of youths to overseas in search of better opportunities is the major reason behind shortage of construction workers. Rise in transportation cost has also raised construction cost.

source: republica,10 Dec 2013