A ₹1 crore house may soon see a price hike of about 10% due to a more than 23% rise in construction material costs. Industry experts point to escalating prices of gelatin and diesel, linked to the West Asian conflict, and a supply shortage caused by the shutdown of unauthorized quarries. They caution that these increased material costs are likely to be passed on to homebuyers.
Recent price adjustments indicate significant rises in various construction inputs such as ready mix concrete (RMC), M-sand, P-sand, aggregates, and materials for road construction. For instance, the price of RMC has surged by ₹300 to ₹500 per cubic meter, depending on the grade, with popular grades like M20, M25, and M30 seeing increases of at least ₹500. Similarly, construction aggregates have also risen by ₹300-₹500.
While the construction sector has praised the government’s efforts to combat illegal mining, developers express concerns over the abrupt drop in material availability, which has severely impacted supply chains. Members of Credai Chennai noted that the housing market has already been affected by the West Asian conflict.
“Housing sales have decreased by 30%. Job security is at risk, and potential buyers are hesitant to invest,” said P. Kruthivas, president-elect of Credai Chennai. “At this critical time, rising input costs will inevitably drive up construction expenses.”
Credai plans to present a petition to Minister T.K. Prabhu, urging him to ensure a steady supply of legally sourced construction materials, prevent speculative price hikes, and expedite approvals for compliant mining units to help restore market stability.
The developers’ body pointed out that small and medium-sized builders are particularly affected, as they struggle to secure sufficient material supplies, while larger infrastructure projects consume a significant portion of output from authorized quarries.
S. Ramprabhu, chairman of the DTCP committee at the Builders Association of India, stated that there are over 400 authorized quarries producing quality construction materials. “Their output is adequate, so the government should step in to regulate supply promptly,” he suggested.
E. Srinivasan, president of the Greater Chennai Civil Engineers Association, welcomed the minister’s actions against unauthorized quarries but emphasized that alternative solutions should have been prepared in advance. “When we enter agreements with customers, rising costs make it challenging to negotiate price increases,” he noted.
Rama Rao, president of the Greater Chennai Contractor Association, mentioned their representation to the government after the price of bitumen skyrocketed from ₹45,000 to ₹95,000 per ton. “We are also facing cost increases for other construction materials,” he added.
Meanwhile, Jayaram Venkatesan, convenor of Arappor Iyakkam, stated that there will be “heavy pressure” on the minister to reverse actions against illegal mines. “He must maintain his position. If supply diminishes due to the closure of illegal mines, we should ban the export of rough stones and other construction materials to Kerala and utilize legally mined resources for Tamil Nadu,” he argued.
Minister Prabhu assured TOI that discussions are ongoing to tackle the issue.
