SANTIAGO.- Alejandro Fondeur, president of APROCOVICI, the Association of Housing Developers and Builders of Cibao, believes it is necessary to explore measures not only in favor of developers, but also for the population acquiring homes, given the excessive increases experienced in construction materials.
Fondeur advises building a joint agenda between authorities, industrialists, bankers, importers and suppliers, to explore strategies that help manage the effects of the upward spiral in the prices of construction materials.
“While buying a house is an investment that gains value, price increases could become obstacles that limit its accessibility,” the union engineer explained.
He adds that addressing the situation facing the construction sector requires a broad call to action, which, from a cross-cutting perspective, explores a minimum agenda that includes access to financing with preferential rates for builders and buyers, incentives to reduce the costs of importing raw materials, the design of financial instruments that offer certainty to developers and buyers in the face of contingent situations, among other measures.
He opined that since the beginning of the pandemic, the costs of the most important inputs involved in housing construction have fluctuated upwards in the Dominican Republic, highlighting figures from the National Statistics Office (ONE), which show that from April 2020 to September 2022, the prices of some materials had accumulated net increases between 72.96% and 36.27%.
He noted that “the price reductions that occurred between August and September are minimal compared to the high costs that various materials have experienced since 2020; especially those that are pillars in the construction of housing.
“Therefore, it is important to look for alternatives, since the sector continues to experience a moment of uncertainty regarding prices,” suggested the president of APROCOVICI.
The main price increases were experienced by wood, rods and electrical materials, and even with the reduction recorded between August and September 2022 of -5.96%, -5.52% and -1.32%, respectively, they had a net accumulated increase in two years of 72.96% in the price of wood, 69.51% in the price of rods and 63.3% in electrical materials.
A similar situation occurred with other materials, which despite showing a reduction between August-September 2022 (PVC pipe -17.4%, paint -0.75% and coatings -0.43%), ended with a net accumulated increase in two years of 59.4%, 44.94% and 39.03%, respectively, he added.
Adding to this picture are essential construction materials that have been steadily rising since April 2020, such as cement, which has accumulated an increase of 36.27% as of September 2022, aggregates 37.03%, and windows 36.87%.
Other factors that affect the final cost of housing
In addition to the direct costs of raw materials, there are additional factors that put pressure on housing prices, such as the increase in interest rates on interim loans, which in recent months have had an average increase of 35.63%, which increased the cost of housing construction by 1.61% and, since it is not a Direct Cost, it is not reflected in the statistics of the Direct Cost Index of Housing Construction (ICDV).
Another factor is the increase in wages, since according to the ONE, National Statistics Office, the minimum wage for labor in industry increased by 21.75%, although the reality is that the increases in this area have been above 25%.
