ACOPROVI, APROCOVICI and CADOCON issued a call to authorities, industrialists, importers and suppliers in general to work together to find mechanisms and alternatives that will help achieve significant reductions that can mitigate the extraordinary increases that construction materials still maintain.
SANTO DOMINGO.- The fluctuation in the dollar exchange rate in recent months has significantly affected housing developers who set prices and built projects when the US dollar was more expensive, and are now selling and delivering projects with a cheaper currency.
This situation has generated "million dollar losses for this concept," the guilds representing the builders stated in a press release, before positively assessing the appreciation that the Dominican peso has experienced in the face of a high inflation scenario like the one the country has experienced.
They state that these measures have prevented a more complex situation that would have meant a process of devaluation of the national currency.
The three organizations that signed the document are ACOPROVI, Association of Housing Builders and Promoters; APROCOVICI, Association of Housing Promoters and Builders of Cibao; and CADOCON, Dominican Chamber of Construction.
In a document published as a paid advertisement entitled "The Reality of Current Housing Construction Costs," the three main organizations representing the construction sector detailed the price behavior of nine inputs, fundamental to the building process.
“All the aforementioned factors have greatly increased the final cost of housing, affecting promoters, companies, developers and buyers,” they stated, citing the various variables that the sector has had to face in the last two years and that have caused imbalances in the prices of housing units.
The rosary of building materials
Nine basic construction materials experienced net increases ranging from 36.87 to 72.96% in the last two years, so the unions assure that the increases recorded in housing prices are due to the real readjustment of these quantities in the local market.
Thus, in the period April 2020-September 2022, wood increased by 72.96%, PVC pipes by 59.40%, steel/rod by 69.51%, electrical materials by 63.30%, while paint registered increases of around 44.94%.
In the case of ceramics the increase corresponds to 39.03%, cement 37.27%, aggregates (sand and gravel) registered 37.03%, windows 36.87%.
“The reality is that despite discounts on some materials in the local market, material prices remain very high, and the decrease in some raw materials and maritime freight internationally has not translated into significant price changes compared to the accumulated increases since the start of the pandemic,” the statement explains.
They explain that when talking about housing costs, it is necessary to understand that current prices are based on the real increase in construction materials and other variables since the beginning of the pandemic, a time when most of the housing projects that are currently in the delivery process have been developed.
“The official data that most helps to understand the impact on prices is the Direct Cost Index of Housing Construction (ICDV), carried out by the National Statistics Office (ONE), which has increased by more than 40%, as can be seen in the table presented below and which shows the variations of some materials with a great impact on the cost of the square meter of construction.
Interest rate on loans
Regarding the loan rate, the agencies identified an increase of 35.63% in the first ten months of this year, going from 7.83% in January to 10.62% in October.
ACOPROVI, APROCOVICI and CADOCON issued a call to authorities, industrialists, importers and suppliers in general to work together to find mechanisms and alternatives that will help achieve significant reductions that can mitigate the extraordinary increases that construction materials still maintain.
“It is urgent to protect the construction sector, which contributes about 15% of GDP and more than 400,000 direct jobs and is a fundamental part of the economic and social development of the Dominican Republic.”.
