Building materials' prices down by 5-10 pc

KATHMANDU: Prices of construction materials have decreased by five to 10 per cent compared to the previous month as demand has decreased sharply. The major reason as stated by the construction material dealers for decrease in demand is the financial institutions’ reluctance to provide loans and their higher lending rates.

“NRB’s instruction to banks and other financial instruction to invest only 40 per cent of investment in real state business has greatly hit the construction business,” said Mahesh Rungta - a dealer of Far Eastern Trading Company. He added that it is a favourable time for those thinking

of constructing a house as

the price of cement has

fallen by Rs 30-35 per sack whereas that of rods has dipped by Rs 10-15 per kg.

“The impact of this price drop will be that people starting constructiong of new houses now will have a cost reduction by four per cent compared to those who started construction last month,” said Roshan Dahal, a contractor.

Records of Nepal Construction Materials Dealers´ Association (NCMDA) show the demand for construction materials has gone down sharply. Teku dealer Surendra Das Shrestha said the price

of Indian cement has fallen more sharply than that of Nepali cement. “To compete with Indian construction materials, Nepali cement manufacturers are forced to decrease the prices of their products greatly,” he said.

The price of Reliance cement is Rs 595 per 50-kg sack, which was Rs 660 last month. Since cement occupies 29 percent of the overall construction cost, the drop in the price of cement had made fresh construction cheaper by two per cent than a month ago. Likewise, the price of steel rods has gone down to Rs 64 per kg. A month ago, the price was Rs 73-75 per kg. The price of different brands of steel rods like Panchakanya, Himal, Saakha and Jagadamba varies by about Rs 10-15 per kg compared to the previous month, said Shrestha.

The drop in price of steel rods that comprise 29 per cent of overall construction cost has further reduced construction cost by more than 3 per cent a month ago. The price of sand has remained constant at Rs 50 per cubic feet while that of bricks has decreased by Rs 500. Earlier, it was Rs 8,000 per 1,000 bricks and bricks cost Rs 7000-7300 per 1000 pieces. However, the price of bricks varies from place to place, depending on the production rate of brick industries.

“The price of construction material is different at different place, with variation by about Rs 2 to 3 per kg of

steel rods in Kathmandu, Pokhara and Birgunj,” said proprietor of Koteshwor Steel Shop, Deepak Shrestha. “When steel and cement reach retailers, the prices vary to a large extent,” said Shrestha.

He stressed that the government should control the quality of construction materials and at the same time foil manufacturers’ bid to create fake price hike in the market. He added that manufacturers are cheating the government by paying less tax than the actual amount to be paid.

Comparison of rates

Cement per sack in Feb Jan

• Jagadamba Rs 595 Rs 660

• Reliance Rs 570 Rs 600

• JP Rs 615 Rs 660

• Brij Rs 580 Rs 620

• Nirman Rs 575 Rs 600

• Hetauda Rs 700 Rs 725

• Himal Rs 600 Rs 615

• Ambe Rs 590 Rs 625

• Maruti Rs 700 Rs 725

• Prism Rs 610 Rs 640

Steel per kg in Feb Jan

• Jagadamba Rs 64 Rs 73

• Panchakanya Rs 64 Rs 74

• Saakha Rs 63 Rs 73

• Himal Rs 63 Rs 71

• Evrol Rs 63 Rs 69

• Bandana Rs 62 Rs 68