Taken from Listín Diario
SANTO DOMINGO.– In a period of one year, the direct costs of housing construction in the country increased by 14.69%, and projections from representatives of the sector indicate that they will continue to rise because the war between Russia and Ukraine has once again complicated the situation.
Last February, virtually all types of housing, as well as materials and subcontracts, registered increases.
Among the materials that increased in price between February 2021 and the same month in 2022 are cements and glues, steel, wood, aggregates, paint, PVC2 pipes and parts, wires, nails, zinc, among others.
These increases have translated into a rise in the cost of single-family homes with one and two levels and multi-family homes with four levels, which in February increased by 0.09%, 0.11%, and 0.54%, respectively.
These price increases apply to houses built in the National District and the province of Santo Domingo, which is the area taken into account to prepare the Direct Cost Index of Housing Construction (ICDV).
The analysis does not include indirect costs such as land, design, building permits, financial costs, construction company profits, and other factors that contribute to the final price of homes.
The ICDV is published by the National Statistics Office (ONE) and coordinated by the Dominican Association of Housing Builders and Promoters (Acoprovi).
Outlook:
Industry representatives anticipate that this upward trend will continue, especially starting next month when labor costs will rise due to the government's plan to increase wages for workers in the sector. For this reason, they have been making suggestions to the government since last year to address the situation.
One of the recommendationsisthat the calculation of tariffs and the Tax on Transfers of Industrialized Goods and Services (ITBIS) paid on raw materials and construction products should be based on the freight cost before the pandemic. This takes into account that freight prices have skyrocketed by more than 300% in some cases, as explained by the president of Acoprovi, Jorge Montalvo.
Montalvo indicated that this could be a temporary measure while prices stabilize in international markets. The authorities have responded that they are willing to evaluate this and other suggestions
Sector growth
In 2021, construction activity grew by 23.4% and consolidated itself as the sector with the greatest impact on economic growth.
This growth was largely driven by private investment in the development of major real estate projects of low and medium cost residential units, among other aspects, according to the Central Bank's (BCRD) economic report.
The report states that the sector's behavior is also reflected in the dynamism observed in the local sales volumes of the main inputs of this industry, such as metal structures, whose sales grew 35.8%; the sale of paint increased 32.9%; that of cement 24.2%; and the rest of the materials (2.5%).
Similarly, last year the resources channeled through the financial system for the construction and acquisition of housing increased by 15.4%.
The increase is around 30%.
The president of Acoprovi, Jorge Montalvo, has estimated that since the beginning of the pandemic to date, costs in the construction sector have increased by around 30%.
Salary increase
This week the Government arranged a 24% increase for construction workers.
