The price of homes rises up to 30% per square meter
orge Montalvo asked for agility in the approval of the permits for the projects. (FILE)
The rise in the prices of construction materials caused the cost of homes in the Dominican Republic to skyrocket between 25% and 30% during the last year, per square meter, as revealed by the president of the Dominican Association of Builders and Housing Promoters (Acoprovi).
Jorge Montalvo, head of Acoprovi, explained that the rising cost of building inputs meant that a house that previously cost RD $ 2 million currently has a price of RD $ 2.5 million on the market.
Montalvo said that in many cases, home developers have had to assume an important part of the increases in materials, although he warned that new projects will reflect the changes that have occurred in the price of the square meter of construction.
“We estimate that with the increases that have been taking place since last year in this part, with materials that have shot up to 120%, that translates into the cost of the square meter of construction having skyrocketed in that period in 25-30%, which is an important number,” he explained.
He said that these increases in construction supplies in the short term have caused housing developers to have difficulties in transferring that cost to purchasers.
However, the president of Acoprovi considered that the stabilization of freight prices is good news for the sector, which has been affected by this issue.
He added that the cost of freight has caused a shortage in the construction sector of some materials such as floors and electrical wires, although he clarified that for the moment the situation has not reached a critical point.
The top executive of the association that brings together the country’s home builders stressed that the sector “is doing well, growing by 36.5% as of last July and with a share in gross domestic product (GDP) of about 15%.”
“The sector has been revitalizing and responding to monetary measures. There are good prospects for next year and many projects in the pipeline that require agile processes. Hopefully in a short time we can h/ave the so-called ‘zero bureaucracy,’ that we can have short-term permits for our projects and disbursements in 24 hours ”, he said.
Jorge Montalvo revealed that they have been in communication with the Government. He pointed out that the measures announced last July to curb the impact of inflation were affordable at the time, since the prices of some materials fell, but they rose again in a short time.
He indicated that one of the measures proposed to the Government by the sector was that, to calculate tariffs and taxes, prepandemic prices will be taken into account, “but they have not paid attention.”
The rise in the square meter has had an impact on all segments, since construction materials, such as cement and rebar, are among the most widely used at a general level, but they are also the ones that have increased the most.
However, he highlighted that one of the most affected projects are the low-cost ones due to the high amount of cement and rebar with which they have to work to achieve the final work and the price may vary for the portion of finishing materials that you need.
“But in the end they are having an increase in all lines,” he added.
He maintained, however, that the construction sector is at its best because demand has grown, especially in low-cost areas and they expect that next year it will increase more.
He specified that one of the great challenges facing the sector is precisely the issue of construction materials and their stability in the market.
“The sector is doing well and expectations are good, interest rates are competitive, it means that the elements are in place for the sector to continue growing,” he said.
The price increases stink !!! Even to do upkeep of properties because of wear and tear has become costly for owners.
A big concern should be about developers of properties taking construction shortcuts to save costs. These shortcuts take away the quality and safety of those constructions. Examples would be using less cement in mixes, less rebar, installing unsuitable house wire gauge, and ect.
The question added to the concern is what are the government inspectors doing to make sure constructions are up to code? Suspect they leave the responsibility to the developers.