The president of Acoprovi says builders have had to absorb some of the price increases and that there is a shortage of materials
Taken from Diario Libre
SANTO DOMINGO.– The rise in construction material prices caused the cost of housing in the Dominican Republic to skyrocket between 25% and 30% per square meter during the last year, according to the president of the Dominican Association of Housing Builders and Developers (Acoprovi).
Jorge Montalvo, head of Acoprovi, explained that the increased cost of construction materials has caused a house that previously cost RD$2 million to now have a market price of RD$2.5 million.
Montalvo stated that in many cases housing developers have had to absorb a significant portion of the increases in materials, although he warned that new projects will reflect the changes that have occurred in the price per square meter of construction.
“We estimate that with the price increases that have been occurring since last year, with materials that have skyrocketed by up to 120%, this translates into the cost per square meter of construction having skyrocketed by 25-30% during that period, which is a significant number,” he explained.
He said that these increases in construction inputs in the short term have made it difficult for housing developers to pass that cost on to buyers.
However, the president of Acoprovi considered the stabilization of freight prices to be good news for the sector, which has been affected by this issue.
He added that the cost of freight has caused shortages in the construction sector of some materials such as flooring and electrical wire, although he clarified that for the moment the situation has not reached a critical point.
The top executive of the association that groups the country's home builders highlighted that the sector "is doing well, growing by 36.5% as of last July and with a share of the gross domestic product (GDP) of about 15%.".
“The sector has been gaining momentum and responding to monetary measures. There are good prospects for next year and many projects in the pipeline that require streamlined processes. Hopefully, in a short time, we can achieve what's known as 'zero bureaucracy,' obtaining permits for our projects quickly and receiving disbursements within 24 hours,” he stated. Regarding the Government
Jorge Montalvo revealed that they have been in communication with the government. He noted that the measures announced last July to curb the impact of inflation were affordable at the time, as they lowered the prices of some materials, but that they soon rose again.
He indicated that one of the measures proposed to the Government by the sector was that, for the purposes of calculating tariffs and taxes, pre-pandemic prices would be taken into account, "but they have not paid attention.".
Low-cost ones, the most affected
The rise in the price per square meter has affected all segments, since construction materials, such as cement and rebar, are among the most used in general, but they are also the ones that have increased the most.
However, he pointed out that one of the most affected projects is the low-cost one, due to the large amount of cement and rebar they have to work with to achieve the final work, and the price can vary depending on the portion of finishing materials needed.
“But in the end, they are seeing increases across the board,” he added.
He maintained, however, that the construction sector is at its best, because demand has grown, especially in low-cost areas, and they expect it to increase even more next year.
He specified that one of the major challenges facing the sector is precisely the issue of construction materials and their stability in the market.
“The sector is doing well and expectations are good, interest rates are competitive, which means that the elements are in place for the sector to continue growing,” he noted.
