According to the Direct Housing Construction Cost Index (ICDV), published by the National Statistics Office (ONE), the cost per square meter of construction has increased by 28.3%. This ICDV could jump to as much as 40% when the announced increase in cement and steel prices takes effect, coupled with the wage increase for workers in the sector
SANTO DOMINGO.- The relentless rise in construction material prices and the resulting increase in housing prices prompted a reaction yesterday from the Dominican construction sector, with a list of proposals for the Government and its public policies.
Months ago, the unions requested, and reiterate in their new proposal, an evaluation, "with the utmost urgency," of the current calculation of tariffs and ITBIS (Value Added Tax) on raw materials and finished construction products, using the pre-pandemic freight price as a parameter; since the beginning of the COVID crisis, the cost of international transport has skyrocketed, which has affected the price of materials and, therefore, the price of housing.
“Likewise, the sector has turned in favor of promoting free competition, proposing that the State evaluate - together with the Commission for the Regulation of Unfair Trade Practices and Safeguard Measures (CDC) - the need to eliminate the current antidumping measures for a period of 6 months, which would allow the entry of essential construction products, such as steel, among others, with the tariff established for it, without any penalty or additional cost,” the groups request in a statement.
The plaintiffs are the Dominican Association of Housing Builders and Promoters (ACOPROVI), the Association of Housing Promoters and Builders of Cibao (APROCOVICI), and the Dominican Chamber of Construction (CADOCON), who are asking for the proposals to be studied with the aim of preserving the right of more Dominicans to access decent housing.
Similarly, the construction sector associations are proposing monetary and financial initiatives, with a view to creating the conditions to promote access to financing facilities with interim loans at competitive rates for real estate project developers.
“As well as mortgage loans, at low interest rates and a reduction of the transfer tax for purchasers of new homes from 3% to 2%, for a period of one year,” they suggest.
“In order to diversify purchases and contracts, it was proposed to evaluate the possibility of conducting open public tenders of a national and international nature by the State, with the intention of opening the gap for the purchase of certain construction products necessary for the development of public sector projects.”.
Prices through the roof
According to the direct housing construction cost index (ICDV), published by the National Statistics Office (ONE), the cost per square meter of construction has increased by 28.3%, the document states.
They state that the escalation of construction material prices since 2020 has increased by around 60% and 40% in the case of steel and cement respectively, a figure that could continue to increase the ICDV in the coming months by up to 40%, when the announced increases in said materials come into effect and with the recently approved adjustment in the minimum wage rates of the construction sector.
The trade associations add that global inflation and the precarious state of international transport logistics have severely impacted the construction sector since the pandemic, according to their report. “This situation is further exacerbated by the armed conflict between Russia and Ukraine, which has affected the prices of construction materials and essential building supplies locally,” state the organizations representing the Dominican construction sector.
