He said that this sector has a multiplier effect on the economy, especially in the informal sector.
SANTO DOMINGO. – Economist Alejandro Arredondo revealed that the decision by the Ministry of Housing, Habitat and Buildings (Mivhed) comes at a critical moment for the sector.
In an interview during the fourth installment of the program “La Ventana de El Inmobiliario ” , he highlighted that, at a macroeconomic level, the industry has been affected since last year by several important factors.
He explained that these variables include high interest rates, increases in the price of materials, and the decrease in foreign labor due to recent deportations.
The expert stated that the measure, announced on May 15 , shook the sector due to the significant increase in these rates.
“The recent measure by the Ministry of Housing and Buildings, which adjusts the fees for both licenses and inspections, seems to have surprised the construction sector because the increases are as high as 800%,” he noted.
Within the overall impact, Arredondo noted that construction companies will be affected by cash flow issues , considering that engineers typically manage two to four projects.
“If this increase is implemented as planned, what they have to pay for the license and for inspections will be higher because we are talking about increases from 6,000 to 38,000, and even up to 100,000,” he explained.
Furthermore, he commented that another consequence will be evident in the increase in the cost of housing , since this increase will cause a "chain effect".
“The part that has to do with the construction of the buildings, this can be translated into a chain effect because the units are built, whether apartments or towers, and that will increase the cost of housing,” he said.
The economist pointed out that, from the Government's perspective, it is essential to analyze the situation in each sector before implementing new regulations, and to carefully consider when these could come into effect in order to avoid adverse effects.
“In other words, when a government measure is going to be taken, many times you have to think about when it will occur, because we have seen that, in the past, measures have been taken and it has not been the right time, and they have had to backtrack because it has a negative impact,” he warned.
During the interview, conducted by Ana María Ramos, founder and director of the El Inmobiliario , she stated that the construction industry is a sector that represents 15% of the Gross Domestic Product (GDP ) of the Dominican Republic.
In that sense, he emphasized that this sector has a multiplier effect on the economy , especially in the informal sector.
“When they start building a tower, the first thing that sets up is a woman selling food, and that's an informal business that will generate a type of employment because she'll need an assistant, and as long as the tower lasts, whether it's a Dominican woman's business or a foreigner's, it will be demanding goods and services,” he explained.
To expand on the interview, we invite you to visit our YouTube channel to watch this and other episodes of El Inmobiliario Window ” .
Photo: Solangel Valdez.
