NewsWhore
03-09-2011, 03:50 PM
In the face of higher oil prices, which yesterday closed at US$105.02 a barrel, construction materials are not far behind. For builders and housing promoters, this is a cause for concern. For example, cement increased in price from RD$235 a bag to RD$275 and RD$280, which represents a RD$45 increase, or 22%.
At the same time, the price of rebar, which in December was RD$36,000 for a bundle, is now RD$45,000, an increase of RD$9,000 in just over two months, equal to 25%. Cement and rebar are the two items that most affect the construction sector. Other items that have increased in price are baling wire, paint, electric wiring, gravel, and sand. All of this implies an increase in the cost of a house of between 10% and 20%. According to Diario Libre, Jose Rodriguez Caceres, the founder and past president of the Association of Housing Builders and Promoters (Acoprovi), said that a house that cost around a million pesos will now cost RD$1.2 million, and a house that cost RD$2.0 million would now cost RD$2.4 million.
He said that the increase in the prices of building materials, as a result of the increase in the price of oil, have a greater effect on low-cost housing than on luxury housing. He said that the proportion of concrete used in luxury houses is less than in more basic dwellings. He went on to say that this is a worrying situation since it will lead to increases in the cost of houses between 15% and 20% in the next six months if the current prices of oil are maintained. He referred to the fact that housing prices are not adjusted right away, but rather older units are sold and the people adjust the prices of the newer units, and these are the ones with higher prices.
More... (http://www.dr1.com/index.html#7)
At the same time, the price of rebar, which in December was RD$36,000 for a bundle, is now RD$45,000, an increase of RD$9,000 in just over two months, equal to 25%. Cement and rebar are the two items that most affect the construction sector. Other items that have increased in price are baling wire, paint, electric wiring, gravel, and sand. All of this implies an increase in the cost of a house of between 10% and 20%. According to Diario Libre, Jose Rodriguez Caceres, the founder and past president of the Association of Housing Builders and Promoters (Acoprovi), said that a house that cost around a million pesos will now cost RD$1.2 million, and a house that cost RD$2.0 million would now cost RD$2.4 million.
He said that the increase in the prices of building materials, as a result of the increase in the price of oil, have a greater effect on low-cost housing than on luxury housing. He said that the proportion of concrete used in luxury houses is less than in more basic dwellings. He went on to say that this is a worrying situation since it will lead to increases in the cost of houses between 15% and 20% in the next six months if the current prices of oil are maintained. He referred to the fact that housing prices are not adjusted right away, but rather older units are sold and the people adjust the prices of the newer units, and these are the ones with higher prices.
More... (http://www.dr1.com/index.html#7)