This article was published on September 2nd of last year, as part of the first edition of El Inmobiliario. We are taking advantage of its first anniversary to share it with our readers.
SANTO DOMINGO – The construction sector is expected to surpass pre-coronavirus levels this year, with an estimated growth of between 15% and 18%. Of that figure, 80% is projected to be housing, exceeding the 2019 growth rate of 10.5%.
Data certified by the National Housing Institute (INVI) in the first half of this year establishes that 12,000 units were built through public-private partnerships, while last year it reported 14,000 housing units built throughout the year.
“This means that, as it has been in the first half of the year, it will end up leading growth, as established by the Central Bank data, which clearly shows that the fastest growing segment in that period is construction, which practically accounts for 18% of GDP,” says Jorge Montalvo, president of the Association of Housing Builders and Promoters (ACOPROVI).
Although it includes other categories, he assures that the largest percentage will correspond to housing because the COVID-19 lockdown motivated people to take it as a priority and since the last quarter of last year, when commercial activities restarted, the dynamism of the sector has been upward with surprising demands for its promoters.
Montalvo is clear, however, that among the challenges facing the insurance sector is ensuring that projects in the pipeline are not impacted by a significant price increase that causes clients to halt their decision to finalize the sale; hence the importance of continuing to take measures to stop the increase in raw material costs.
He stated that since last year, input costs have risen between 50 and 100%, which has resulted in the price per square meter skyrocketing between 25 and 30%, an impact he considers brutal for the market.
During working sessions held last month at the National Palace, ACOPROVI recommended that, on a temporary basis, tariff calculations be based on pre-pandemic freight rates, a measure that would have an immediate impact on construction materials. “In China, freight costs jumped from just over 2,000 to more than 12,000, a disproportionate increase,” Montalvo emphasized.
As a result of these meetings, through the Ministry of Industry and Commerce, a 15% price reduction was achieved for cement, which will be in effect until December 31 of this year, although only for state programs; PVC was reduced by 15% and the most commonly used steel was readjusted by 4% and 8% for the entire sector; although the leader understands that these reductions do not yet have a sufficient impact on the market, taking into account the increases experienced in these products in the last year, some of which reached 100%.
The Ministry of Housing applauds
The president of ACOPROVI celebrated the creation of the Ministry of Housing, Habitat and Buildings (MIVHED) because he understands it is a conquest demanded for more than 22 years in the association.
“We understand that this is a crucial step because we were one of the few countries that lacked this law. With it, we will be able to implement public policies on this matter, which was previously scattered. A few years ago, any ministry could have a housing plan, but it wasn't an effective way to address the housing deficit,” he said.
He cited the latest data from the National Statistics Office (ONE), which set the housing deficit in the country at almost two million. “We have the qualitative deficit, which refers to vulnerable housing and is around 1.4 million units, and the quantitative deficit, which is almost 600,000 units.”.
He understands that with the scheme of including the private sector in low-cost housing programs, a ten-year plan will begin to be developed that establishes goals and that every Dominican can fulfill the dream of having a decent home.
