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Construction material prices soar, fear of rising house prices

Prices of steel, cement, sand, concrete… race to rise rapidly. The high price of construction materials not only makes construction contractors and investors suffer, but customers also suffer because of high house prices.

Steel, cement, sand, concrete race to increase prices

On March 15, a series of enterprises announced to adjust the selling price of construction coil and rebar products by 600,000 VND/ton. Currently, the price of steel at some enterprises exceeds 19 million VND/ton.

This is the increase steel price 3rd within the last fortnight. Like the previous price increases, the reason for the price increase given by the production and trading enterprises was due to the high price of steel billet and input materials, so the selling price had to be adjusted.

Steel prices started to increase after the Lunar New Year and currently show no signs of cooling down. Since the beginning of the year, the price of construction coil has increased by 2.45 million VND/ton.

In addition to steel, a series of other construction materials such as cement, sand, concrete,… also raced to increase prices.

Iron and steel, cement... all increased, house prices at risk to new highs
Steel prices skyrocketed

Many manufacturers recently announced that from March 20, they will increase the selling price of cement by 100,000 VND/ton of product to offset the increase in input costs. The price of input materials in cement production is currently increasing, especially gasoline and coal prices have increased sharply, supply is scarce, leading to higher cement production costs.

Prices of many types of materials in Hanoi are currently increasing sharply. For example, the price of leveling sand is about 150,000-200,000 VND/m3, for building sand is from 400,000 to 450,000 VND/m3; price of pipe bricks ranges from 1,300-1,400 VND/piece; construction stones cost 310,000 VND/m3; cement price from 900,000 VND to 1 million VND/ton. The prices of these construction materials are currently increasing by about 10% compared to the time before the Lunar New Year.

In Ho Chi Minh City, the price of construction materials also increased. For example, cement increased by 18%, construction bricks increased by about 10, decorative bricks increased by 10-15%, sand price increased by 10,000 VND/m3 compared to the beginning of the year.

Not only the price of construction materials increased, but the price of home decoration items also increased. Ceramic tiles increased by about 50,000 VND compared to the previous month, to 250,000 VND/m2; wood-plastic panels for flooring increased by 45,000 VND/m2, to 185,000 VND/m2; laminate flooring increased by 50,000 VND/m2, to 350,000 VND/m2…

Prices of construction materials such as bricks, stones, cement, steel… are forecasted to continue to increase in the coming time due to the influence of fuel prices.

Material prices increase, contractors worry about capital losses

Prices of steel, sand, bricks, cement… simultaneously increased, causing many construction contractors to struggle, many projects worried about progress and losses. According to calculations of many construction contractors, each project they only make about 3-5% profit. When the price of construction materials increases, the contractor has to bear a loss.

Construction material prices soar, fear of rising house prices
The high price of construction materials causes house prices to increase accordingly. (Photo courtesy: VNA)

Mr. Nguyen Duc Anh (a construction contractor in Ha Dong, Hanoi) said that from the end of 2021 until now, the price of many construction materials has continuously increased, making contractors not dare to sign package contracts. bags of construction materials) but only accept jobs. If the momentum of the kind building materials If not controlled, many contractors will have to accept to stop the work, accept the progress penalty because the more they do the more losses.

The high price of construction materials also causes many investors headaches. If you don’t increase house prices, you will suffer a loss, but if you increase your house price, you will not be able to sell your house.

An investor specializing in building houses for sale in Hanoi shared that since the beginning of the year until now, the market has been quiet, the number of customers is small, so he was forced to cut profits to keep the selling price and attract customers. If the price of construction materials continues to increase, he must increase house prices, otherwise he will lose money.

Many contractors, because they signed a package construction contract, should find ways to prolong the schedule and wait for the price to drop to reduce losses. But the price of construction materials still increased sharply, the project was delayed, causing the investor to be fined by the customer for late delivery of the house.

This consequence must also be borne by the customer. The increase in construction costs makes investors forced to increase the selling price of real estate. By now, the cost of construction materials accounts for 60-70% of the estimated value of construction work.

In particular, the sharp increase in steel prices greatly affected construction costs. According to the General Statistics Office, the cost of steel accounts for 12-16% of the total construction cost. If the price of construction steel increases by 10%, the construction cost will increase by 1%.

Linh Anh

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