He asserts that global economic indicators do not guarantee sectors that prices will return to pre-pandemic levels
SANTO DOMINGO- While it is true that in recent weeks there have been reductions with a trend towards possible stabilization in the prices of some construction materials, ACOPROVI, the Association of Housing Builders and Developers, clarifies that these reductions could have a gradual and staggered effect on the market, but that it would be premature to show impacts on the value per square meter of construction.
The organization representing builders states that despite recent reductions in the price of raw materials for some construction materials and in international maritime transport freight, the high cost of construction materials continues to be a challenge for housing developers and builders.
“The data that best helps us understand this reality is the increase of more than 40% in the cost per square meter of construction since the beginning of the pandemic, according to the Direct Housing Construction Cost Index (ICDV), published in September 2022 by the ONE. This parameter puts into perspective the significant impact of various factors that affect construction costs, in addition to other variables not included in the index. Therefore, adjusting the final cost of housing is a process that will take time, since, to date, global economic indicators do not assure sectors that prices will return to pre-pandemic levels,” explains a statement from the entity.
Jorge Montalvo, president of ACOPROVI, explained that the discounts that have been given in recent weeks regarding important construction supplies such as rebar and other materials have been very minimal compared to the high costs that have been presented during 2021-2022.
“Therefore, talking about market stabilization is hopeful, but also risky given the instability and uncertainty we are experiencing. It is important to understand that the effect of these price drops on the final price will depend on the behavior of the housing cost index in the coming months, which, according to the latest report from the ONE (National Statistics Office), showed a reduction of only 1.25%, a figure that indicates this is just the beginning of hope for both buyers and developers,” the architect stated.
He adds that the construction sector has faced scenarios in the last two and a half years that have generated chaos in the industry, including the pandemic, economic and real estate inflation and the armed conflict between Russia and Ukraine.
“This reality has been felt in the constant increase in the prices of construction materials, local real estate, interest rates, and labor costs. Therefore, in the face of these new price fluctuations, it is essential to unify efforts to achieve synergy among developers, builders, suppliers, the financial sector, and authorities, with the aim of working together to establish conditions that continue to foster the dynamism of a sector that is fundamental to the economic and social development of our country,” Montalvo maintains.
