A surge in prices of construction materials put the real estate industry in misery as the sector was just getting momentum after a long spell of pandemic-driven slowdown.
Prices of steel, cement, bitumen and cement rose significantly over the past one year, but the realtors found it difficult to make the corresponding increase in apartment prices, as it would go beyond affordable limit of the consumers.
Sources in the industry said per ton rod prices have seen a jump of nearly 35 percent, as it is being sold for Tk 75,000 to Tk 82,000 in the retail market, up from Tk 53,000 a year ago. Besides, prices of other materials used in the industry also increased.
The rise in fuel price and a temporary suspension on giving gas connections only worsened the situation.
According to the Trading Corporation of Bangladesh (TCB), the price of one ton of good quality 60 grade rod is Tk 81,000, up 33 percent from only Tk 64,000 a year ago.
Price of 40 grade MS rod was ranging between Tk 69,000 and Tk 73,000 last week, which was between Tk 55,000 and 60,000 a year ago, the increase being 23 percent.
The prices of clinker, the main raw material for making cement have also gone up in the international market.
Entrepreneurs in the cement sector said the costs are being adjusted by reducing other costs despite hike in raw material prices. However, prices of cement would rise further if the present trend in the world market continues.
They also said as the cost of making clinker increased, so does the price at the export level, and the increase in shipping costs adds to the import price. In all, the price of clinker has increased by $4 or Tk 360 per ton.
All the raw materials for making cement have to be imported, of which, clinker constitutes 62 percent. The country has imported 18 million tons of clinker in the last financial year.
Lion Sharif Ali Khan, vice president of Real Estate and Housing Association of Bangladesh (REHAB), told The News Times that the construction works remained suspended for a long time due to Corona outbreak. When the Corona outbreak subsided a bit we started construction work. But the prices of construction materials, including rod, brick, sand and stone, continued to rise.
Sharif Ali Khan, also Chairman of Khan Builders & Development Ltd., said as the price of construction materials rises, so does the overall cost of construction industry. The cost of construction of apartments has also gone up due to rising prices of construction materials.
Manir Hossain, Engineer of Novelty Engineering Corporation, told The News Times that the prices of almost all construction materials have gone up in recent times. Especially the price of rod has gone up. “Now we have to buy everything for construction at higher prices. Transportation costs also rose due to fuel price hike, “he said, adding this has also added to the cost of construction.
