25 February, 2021

Increase in Construction Cost in Pakistan Over the Last 1 Year

Tips & Advice

Over the last one or two years, a significant increase in the construction cost has been noticed. No matters you are developing a residential or a commercial project in Pakistan, this cost is indeed increased. But at the same time, the quality of the construction materials is improved as well, as more options are introduced to choose from. Nowadays, you can get imported materials from the local markets like the tiles, furnishing, and other important things you need to complete your dream place.

Also, there is a significant change in the construction styles of the projects and finishing materials.  However, in this latest blog, we will figure out the construction cost changes over the last 1 year. If you are developing a project or planning to start its construction, this article will definitely help you.

Reasons Behind the Higher Construction Cost in 2021

The construction cost of any property directly depends on the following factors:

  • Location of the Project
  • Covered Area
  • Design and Layout of the Project
  • The Kind of Material Used for Construction

An A+ category house's construction cost will be more than an A category house of the same size. However, the other costs like the labor cost will remain the same. This labor cost differs depending on the city and locality. But also, there is a significant increase in the prices of materials used for the construction of projects such as:

Construction Material

Increase in the Prices (2019-2020)


10 to 19 %

Bricks, Blocks, Tiles

15 to 22 %

Steel Bars and Sheets

18 to 23%

Pipe Fittings

15 to 32%

Glass Sheets

3 to 7%

Ceramics and Sanitary Fixtures

5 to 9%

Paints and Varnishes

10 to 15%

Construction Input Items

15 to 23%

(Source: Pakistan Bureau of Statistics Monthly Price Indices)


Why is the Construction Material Prices Increased?

This chart above shows how the primary construction materials' prices are increased over the last 1 year. However, the cement's prices will hopefully remain under control as the PTI’s Government has recently introduced some construction industry initiatives.

According to the numbers reported by the leading news source, the cement sales is much increased during the second quarter of the fiscal year 2020-2021. The demand for cement is increasing 11% quarter on quarter and year on year basis. The prices of coal are also increased as it is used in the production of cement.

The Pakistan Association of Large Steel Producers has notified that cement prices are increasing in Pakistan, but a similar trend is observed globally. Pakistan Bureau of Statistics has stated that the cost of imports of iron and steel scrap is also gone up.

Data gathered by the research team at a well-known corporation has claimed that cement prices may increase further in the international market. On the other hand, the research analysts concluded that these prices would drop in the coming months.

The construction cost of a high-rise project has risen by 6% to 9%, while housing projects' construction cost has increased up to 4% to 6%.

While concluding all these details, we can say that projects' construction cost is increased much over the last 1 year. Simultaneously, the recent tax exemptions in the construction sector are triggering the speedy construction of projects, and associated industries benefit from it.

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