Since the COVID-19 pandemic swept the globe, global market costs have skyrocketed. For countless reasons, businesses have faced relentless pressure and have all been forced to adjust their prices to weather the storm.
Construction was one of the sectors in the Dominican Republic that the pandemic positively impacted. And if the coronavirus taught us one clear lesson, it was that having decent housing to protect us from the elements and for our health is a sacred right that offers security and peace of mind.
Never before has owning a home been so desirable. Many who had long considered buying a house accelerated their plans and changed their priorities; those who already owned a home redesigned it and expanded its living spaces; others made immediate plans to buy a second home on the outskirts of the city to be close to fresh air and more space.
Amid the dynamism unleashed in the real estate industry by the COVID-19 era, a disturbing element emerged: the prices of construction materials began to rise in an upward race that has never stopped, generated by various factors: some external, others internal and many of a speculative nature.
Originally, the price increases were caused by the halt in freight transport, since the Dominican market, in this case the construction sector, depends heavily on imported products from China, the country where the first case of the virus emerged, and therefore, health measures forced a general halt to activities.
In the Dominican market, where controls and regulations are scarce, any argument is used to increase prices, especially when it was a global event that shook the foundations of the world financial system.
Since then and until further notice, price increases have been the common denominator in hardware stores and establishments that distribute materials used in the construction process: cement, nails, rods, glues, ceramics, toilets, sinks, wood and even the smallest product has been raised in an uncontrolled manner, as many of the materials have experienced increases of 100%.
Adding to this bullish trend is the war in Ukraine that broke out three weeks ago, the result of a conflict between Russia and that country, which has once again shaken the world market, given that these are two nations that import many of the items on which the Dominican market depends.
In the case of Ukraine, the Dominican Steel Association (ADOACERO) states that more than 35% of the iron and molten metal consumed in the Dominican Republic came from Ukraine, which has caused the price of a bundle of steel to rise by three thousand pesos in recent weeks, also generating increases in its various derivatives.
Consumer complaints, hardware store owners, and leaders in the construction sector have been swift, urging the government to take measures to halt the escalation, which will undoubtedly lead to higher housing prices.
One of the measures proposed by the Association of Housing Builders (ACOPROVI) has been its request to the government to use the pre-pandemic freight price as a parameter when calculating tariffs on construction materials, thereby helping the sector.
Construction was one of the main fields that last year obtained the best scores within the growth table, obtaining second place, within the areas that contributed most to the positioning of the Dominican economy.
It is up to the government to take the necessary measures to stop the price increases, which, if left unchecked, will halt the growth of the construction sector and have repercussions for the overall economy; it must also activate price regulation bodies to rein in speculators, who are always on the lookout, taking advantage of circumstances to obtain excessive profits.
