SANTO DOMINGO- Although construction materials continue to experience price decreases, this has not yet translated into lower building costs or increased sales of housing projects, as many hardware store owners claim they must deplete their existing inventories of goods already in storage, which were purchased at high prices.
The president of the Dominican Association of Hardware Stores (Asodefe), Arturo Espinal, indicated that the price of a bundle of rebar has dropped again by about 7%, after falling by approximately RD$10,000 several months ago. “It has dropped by about RD$1,500 more in recent days. Cement has also dropped by about RD$10.00 per bag.”.
In a publication today in Listín Diario, Espinal explains that this reduction in the prices of construction materials is related to the drop in the cost of maritime freight by more than 50%, and said this will be reflected in the coming months in all the merchandise that comes from China, Europe and other places.
The president of the Dominican Confederation of Small and Medium Construction Companies (Copymecom), Eliseo Cristopher, pointed out that in the case of steel, the price reduction has remained at around 12%, and noted that the price of wire has experienced a very significant drop, as it reached RD$18,000 per quintal of soft wire for construction and is currently priced at RD$6,000 or RD$6,500.
In the case of wood, the leader of Copymecom indicated that it has shown a decrease of 12 or 14% and the price of a bag of cement was reduced by RD$15.00 at retail, from RD$475 to RD$460.00.
In the case of construction aggregates, he noted that their price, instead of decreasing, has increased, due to several factors, among which he cited "the successful policy of the Government to prohibit the extraction of aggregate from rivers, which forces the use of quarry materials and makes it more expensive.".
When consulted, Jorge Montalvo, president of the Dominican Association of Housing Builders and Developers (Acoprovi), agreed that the sector has experienced “a significant 7% drop in the price of rebar at the beginning of September and some price reductions in PVC pipes; otherwise, there has been more of a stabilization in prices.”
These price decreases are not yet reflected
The president of Copymecom pointed out that the price reductions for some construction materials have not yet been reflected in the population because many hardware stores claim they have merchandise in inventory that they bought at high prices and must wait to get rid of that inventory before adjusting prices.
Meanwhile, the president of Acoprovi stated that they are monitoring the housing cost index compiled by the National Statistics Office (ONE), which "reflected only a 0.42% reduction in its latest publication, so now we have to wait for suppliers to finish consuming their inventories so that we can see more significant reductions in the prices of construction materials.".
Outlook for 2023
The president of Copymecom, Eliseo Cristopher, recalled that the projections they had made for 2022 indicated that the sector was going to experience a slowdown compared to 2021 when it closed with a growth of 24%.
He added that 2023 is expected to be busier and more prosperous, "although the indicators we are seeing are not the most encouraging, because although materials have gone down, we do not believe they will reach the levels they were at before the pandemic or the war.".
He added that another factor that will affect the sector's dynamism next year is the increased cost of credit resulting from increases in the monetary policy rate.
Rebar
The price of rebar bundles has reflected significant decreases of around RD$11,000 for some months now, according to different actors in the sector.
Cement:
The price of a bag of cement dropped from RD$10.00 to RD$15.00, and according to Copymecom, it previously sold for RD$475.00 and now sells for RD$460.00.
Soft wire:
The price of a quintal of soft wire used in construction has fallen by more than 50%, according to Copymecom. Months ago, it was priced at RD$18,000, but now it sells for between RD$6,000 and RD$6,500. PVC materials have also decreased in price.
Source: Listín Diario with modifications
