The cost of construction is highest in Mumbai across asset classes compared to other metros primarily on account of steep prices of key construction materials like cement, reinforcement steel, structural steel, stones among others.
Chennai and Hyderabad are at the lower ends of the cost spectrum against which the cost of Mumbai is 14 percent higher. Taking into account the other metros like Bengaluru, Pune, Delhi, the overall average cost increase in Mumbai is 10 percent, according to an analysis guidebook Construction Cost Guide Book by JLL.
The higher costs in Mumbai are largely attributable to corresponding and so on. The guidebook throws light on the market trends, construction cost of real estate assets across major markets of India and includes a cost matrix representing different style and quality levels, an analysis of market trends of the major building materials, it said.
Hyderabad and Chennai have the lowest average construction costs where costs are about 14% lesser than Mumbai. The impact of COVID-19 on market benchmark rates has been neutral to significant, depending on the asset classes.
“Going ahead, we see cost as one of the key drivers in real estate decisions. Many firms today are relooking at their real estate choices to optimise spend. While the true impact of pandemic on construction costs is still being discussed and debated, the general trend is obvious – construction costs are on the rise. Customer spends are going to be more directed towards aspects that give a better employee experience,” said MV Harish, Managing Director, PDS, JLL India.
The average cost of construction for a luxury residential apartment in a high-rise building in Mumbai is Rs 5,625 per sq. ft, while in Delhi and Pune, the price would be Rs 4,950 per sq. ft and Rs 4,905 per sq ft respectively, while in Hyderabad such a house would command Rs 4,275 per sq. ft. Similarly, constructing a mid-rise luxury apartment will cost Rs 3,875 per sq. ft in Mumbai and Rs 3,410 per sq. ft in Delhi.