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What is the minimum cost to build a house?

The average construction cost of a 1,000 sq ft home may vary between Rs 1,300 per sq ft and Rs 5,000 per sq ft.

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While housing units in a gated community offer a plethora of amenities and facilities, they are generally not tailor-made. Therefore, many people prefer independent home constructions as it allows them to customise their abode as per their liking and convenience. However, the development of a house involves particular challenges. It requires immense patience and detailed construction estimates to avoid mismanagement of funds. Generally, homeowners are either unaware or negligent about the development cost. Consequently, several challenges may arise, varying from cost-escalation to sub-standard construction quality. To help with the process, 99acres has collated the necessary points to consider while arriving at the average cost of constructing a house in India.

Average cost of construction in India (Jan 2023)

Expenses Average Expenditure for a 1,000 sq ft home Architect Rs 15,000 onwards Brick wall construction (without RCC) Rs 800 per sq ft Brick wall construction with RCC) Rs 900 per sq ft Civil work Rs 1,500 per sq ft Electrician/Plumber Rs 2,500 per sq ft Raw material cost Rs 7 lakh onwards

Disclaimer: The data has been collected from secondary sources.

On average, building a 1,000 sq ft house in India can cost you Rs 12 lakh. This may vary as per the city and other factors such as labour availability, raw material supply and quality of furnishing you are using.

How do you calculate construction costs?

Plot layout

The first step in constructing a house is the layout of the plot. Here, an architect or a designer creates a design plan for the designated plot. Generally, a layout drawing includes the rooms, kitchen, lavatories, stairs, terrace, balconies, storage area, parking and any other space you may wish to add. However, in exchange for the services offered, the architect or the design engineer charges a fee, which is dependent on the size of the plot.



For instance, if the plot size is 1,000 sq ft, the architect may charge between Rs 15,000 and Rs 20,000. However, the rates may differ across locations, albeit marginally.

Regulatory laws and norms

The building regulations vary across locations and may increase the project deadline and construction cost. For instance, if your land is in an ecologically sensitive location, you have to approach the municipal body or the gram panchayat under whose jurisdiction your property is located and seek construction permission. This may result in cost overruns and delayed project deadlines. Also, some cities have strict development rules that should be duly observed to get approvals. For instance, if you are planning to build a two-floor house in Delhi, it is crucial to have stilt parking. In case your building plan does not have this provision, the municipal body would reject the plan. According to Rituraj Verma, Partner, Nisus Finance, “The construction cost of a house mainly depends on two things - civil work and the finishing work. While the civil work includes the structure of the house, the finishing work entails doors, windows, wooden cupboards, flooring, roofing, wall designs, and painting. Holistically, the construction costs vary from Rs 1,000 sq ft to Rs 5,000 per sq ft, depending upon the city and construction site.

Civil cost

The civil cost majorly incorporates the cost of raw materials used in the construction of plinth, walls, roof, boundary wall, parfait, floor work and plastering. The raw materials majorly include bricks, cement, concrete, sand, and RCC reinforced steel, among others. However, stating the quantum of raw materials is usually difficult as it largely depends on the design of the structure. Moreover, shuttering, contractor, and labour charges are also a part of the civil cost. Note - Hire a contractor with experience in the field of construction. Civil construction involves several challenges, and there could be a situation where the contractor is required to take prompt decisions. Thus, the experience would make things easier and hassle-free.

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Typically, the cost of brick wall construction without RCC column differs from Rs 800 per sq ft to Rs 900 per sq ft. On the contrary, the brick wall construction with RCC column ranges from Rs 900 per sq ft to Rs 1,000 per sq ft.

Finishing cost

As mentioned above, finishing work comprises doors, windows, wooden work, electric fitting, sanitary fittings, pop work and grillwork. The finishing cost usually varies from Rs 500 per sq ft to Rs 3,000 per sq ft, subject to the amenities involved. Normal finishing work with grey flooring starts from Rs 500 per sq ft and goes up to 700 per sq ft. However, medium finish work that includes tiles or local wooden floor work ranges from Rs 1,000 per sq ft to 1,200 per sq ft. In case you prefer premium finishing along with teakwood floor then the cost may differ from Rs 1,500 per sq ft to Rs 3,000 per sq ft.Kuntal Vyas Aggrawal, Director, Resaiki Moreover, finishing costs also involve labour, such as electrician, plumber, tile mason, carpenter, painter and polisher. Largely, the construction cost of a house is the cost of civil work, along with the finishing costs. Therefore, the average construction cost of a 1,000 sq ft home may differ from about Rs 1,300 per sq ft to Rs 5,000 per sq ft, shares Kuntal. In most cases, construction cost estimates are provided by architects, contractors, or other specialist estimating firms. However, when it comes to self-estimation, an essential factor is the quality of materials used for the construction.

Types of construction raw materials and their costs

The construction raw materials are divided into three classes, i.e. C, B, and A. C Class : Involves construction with low-grade bricks/sand, cheapest fixtures, and low-quality cement grades and steel. Usually, it takes around Rs 7-8 lakh to construct a C-class house measuring 1,000 sq ft. : Involves construction with low-grade bricks/sand, cheapest fixtures, and low-quality and steel. Usually, it takes around Rs 7-8 lakh to construct a C-class house measuring 1,000 sq ft. B Class : Such type of construction involves medium-quality raw materials, ranging from cement to steel and fixtures and fittings. Contrary to C class, a house measuring 1,000 sq ft built with B class materials would take Rs 10-11 lakh to complete. : Such type of construction involves medium-quality raw materials, ranging from cement to steel and fixtures and fittings. Contrary to C class, a house measuring 1,000 sq ft built with B class materials would take Rs 10-11 lakh to complete. A Class: Such type of construction involves using the best resource quality, and therefore, the cost of constructing a house measuring 1,000 sq ft may vary between Rs 15 lakh and Rs 25 lakh. Furthermore, the construction cost may also be influenced by external factors, such as: Construction delays owing to the non-professional attitude of the contractor, labour strikes, or holidays

Increased rental costs of the building equipment

Inefficient use of equipment that results in overhead costs

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A rise in the material prices

A rise in the labour charges

Though the situations mentioned above may or may not arise, it is always better to be prepared for unforeseen challenges and plan a budget accordingly to ensure a hassle-free construction process. Experts advise keeping the flexibility of 15-20 percent of the overall construction cost for any unpredictable circumstances in the process. Also, homeowners must take the Goods and Services Tax (GST) on construction materials into account, while calculating their costs.

Impact of macro factors on construction costs

The COVID-19 pandemic and the Ukraine-Russia crisis have significantly escalated the construction costs in India. Rising fuel prices, shortage of construction labour and expensive crucial input materials, such as steel, cement, stone, and plywood material, have contributed to an increase of up to 25 percent in the average cost of constructing a house in India. With crude oil going up to USD 96 per barrel, the cost of transportation has been a key factor in the rising cost of construction in India. Although the process of home construction may seem lengthy, involving minute planning of costs and resources, it is highly recommended to break down the requisites of home construction to avoid unforeseen expenses during the actual project execution.

How to reduce construction costs?

Here are a few tips that can be helpful in reducing the overall construction cost in India: Source material locally. Be it cement, bricks and blocks, doors and windows, tiles, bathroom fittings or pipes- opt for locally available material. You will save a lot on transportation costs. Factor in the Goods & Services Tax while calculating the construction cost. Building materials attract around 28 percent taxation which can shoot up your overall construction cost. Think long-term. Use good quality building materials to avoid frequent repair and maintenance costs. You can also use greener alternatives to save costs in the future. You can consider a time frame of 30-50 years. Consult multiple contractors and get estimates before hiring anyone. This would help you to understand the market rates and bargaining power you hold. If you are providing the construction material, you can control the labour cost by employing fewer or multiple people at a time. The process of constructing a house may seem like a lengthy process, requiring immense physical and mental bandwidth. However, this may work wonders for homeowners who wish to live in a space designed as per their needs and requirements. Also, with scrutiny of raw materials and prices on a regular basis, your home is likely to have excellent quality and require lesser repair work in the long run. Nonetheless, it is recommended to seek professional assistance to ensure that each step of the construction is performed appropriately, without any lapses.

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