Santo Domingo, DR.
The construction sector has begun to feel a relief with the drop in the prices of such important materials with the bundling of rods, whose wholesale price fell from RD$82,000 to RD$75,00. However, builders remain concerned about the effects of the increase in the monetary policy rate on exchange rates and the downward trend in real estate sales.
The president of the Dominican Association of Ironmongers (Asodefe), Arturo Espinal, pointed out that the drop in the price of rebar and other materials has a positive impact on the sector. However, he indicated that this does not compensate for the situation created by the pandemic when the price of materials increased by more than 100%.
Espinal estimated 15% the decrease that is reflected now in the construction materials but said that there is a situation that worries a lot and is that the dynamism in the sales of real estate has fallen as a result of the economic restrictions of the Central Bank, controlling the circulating money and increasing the value of money for access to loans.
“With all the restrictions that the Central Bank has placed on the money circulating and making money more expensive, now it is much more difficult for any family that would like to acquire a house or a property to have access to a loan, so this has caused a recession and sales have experienced a drop of 40 to 50% compared to previous months”, said the president of Asodefe.
He added that the sector is also affected by paralysis due to an oversupply of local and imported construction materials as a result of the same situation.
Uncertainty remains
The president of the Dominican Confederation of Small and Medium Construction Companies (Copymecom), Eliseo Cristopher, said that it is great news that construction materials are starting to lower their prices after a constant rise.
He explained that this behavior of the market opens a world of possibilities towards the future and recalled that as a result of the panorama which was being lived, the builders were being very cautious with their projects and that several micro and SME companies of the construction were not selling their projects because they did not know how things would be in the next times with the prices, the inflationary process and the increase in the cost of the money for the financing.
Cristopher exposed to Listín Diario that due to the uncertainty generated regarding the profitability of the projects in the real estate sector, the sale of real estate registered at present has a significant reduction.
“Let’s hope now that with the fall of steel, the other materials will follow this tendency, which is very favorable,” said the president of Copymecom.
Other materials should lower their prices.
The president of the Dominican Association of Builders and Housing Developers (Acoprovi), Jorge Montalvo, pointed out that freight rates have dropped significantly, and this should translate into lower prices for other construction materials at the local level.
In spite of this decrease in prices, Montalvo agreed that the sector is in a complex moment and said that builders hope that after controlling inflation, the authorities can think of some release of the legal reserve for new housing at preferential rates.