CBRE Report Highlights 2-4% Annual Increase In Greenfield Construction Costs

Construction costs for greenfield real estate projects rose by 2-4% annually over the past year due to higher input rates, according to CBRE.

On Monday, real estate consultant CBRE released a report titled 'India Construction Cost Trends 2024-25: Navigating Costs in a Transforming Landscape,' indicating a marginal 2-4% year-on-year increase in greenfield construction costs from 2023 to 2024.

In 2024, the costs of cement, steel, and aluminium decreased by 6-8%, 3-5%, and 0-2%, respectively, on an annual basis, while paint costs remained stable.

However, the prices of wood and stone rose by 3-6% and 0-2%, respectively, during the year, reflecting selective demand pressures.

"While certain key material costs experienced moderation, persistent shortages in skilled, semi-skilled, and unskilled labour resulted in a 5% average increase in labour expenditures during 2024. This labour cost escalation effectively negated the material cost reductions, thereby sustaining elevated overall construction costs," CBRE said.

For high-rise housing projects (30 floors), the construction cost is Rs 5,500-6,100 per square foot in Delhi-NCR. The cost is Rs 3,100-3,500 for 12-storey buildings.

Anshuman Magazine, chairman and chief executive officer—India, South-East Asia, Middle East & Africa, CBRE, said, India's construction sector remains a key pillar of economic growth, poised to become the world’s third-largest market by 2025.

"From impressive skylines in cities to extensive infrastructure projects that connect remote areas of the country, the construction sector serves as a vital foundation for India's broader economic objectives," he said.

Stabilising construction costs, rapid urban expansion, and sustained real estate demand foster resilience and new opportunities, Magazine said.

"While workforce shortages present challenges, the sector continues to attract strong investments, driven by sustainability, technology, and high-quality developments," he added.

(With PTI Inputs)