More reasons for house prices to continue to increase in the near future

Statistics in the first 3 months of this year show that a number of construction materials continuously increased in price, of which a number of items had a peak increase. Specifically, cement increased by 100,000 VND/ton depending on the brand, construction bricks increased by about 10%, decorative bricks increased by 10-15%, sand increased by 10,000 VND/m3 compared to the beginning of the year.

In which, construction steel also continuously increased sharply and showed no sign of cooling down. Information from the Vietnam Steel Association also showed that the price of raw materials and fuels for steel production increased again at a high level, causing steel prices to be pushed up. Since the beginning of the year, steel prices have increased 7 times, the total increase to 2.4 million VND/ton, from 16.5 – 17 million VND/ton to more than 19 million VND/ton.

According to the Ministry of Construction, in the first quarter of 2022, the price of construction steel in Vietnam tends to increase sharply according to the general uptrend of the world steel market. Until the beginning of April, construction steel prices have not “cooled down”. Due to the high price of gasoline, the Ministry of Construction predicts that in the coming time these materials will continue to increase in price.

The increase in the price of construction materials is expected to affect the price of houses and construction works.

The increase in the price of construction materials is expected to affect the price of houses and construction works.

Share with PV Infonet, Mr. Nguyen Quoc Hiep, Chairman of the Vietnam Association of Construction Contractors, said that in the face of rising prices of steel, cement and many other construction materials, key projects that the unit price did not change. construction contractors are very difficult.

“If this continues, the construction industry is in danger of decline, many businesses are at risk of bankruptcy and cannot survive. There have been many construction units diverted to other work because materials and materials have increased in price, while the laws and payment settlement for contractors of the investor binding many responsibilities have not been improved… Therefore , a “sweat” construction business can earn 3-4% profit, while the debt is large, that profit may be lost, “said Mr. Hiep in fact.

Also an enterprise that has been building many housing projects, Mr. Hiep said that the increase in raw material prices has affected construction and house prices.

“For example, in the past, low-rise buildings cost about 4 to 4.2 million VND/m2, but now it has increased to 6 million VND/m2 when the prices of cement, iron and steel have all increased.

From there, it will inevitably lead to an increase in product prices; especially for projects and contracts that begin to be signed and constructed, the price will slide up 20-25%”, Mr. Hiep said.

Also share with PV InfonetNguyen Thi Thanh Huong, General Director of Dai Phuc Land Company, said that the price of raw materials has increased from last year to now, which has put pressure on investors who are implementing works, the initial costs in will affect.

In addition to the story of increased raw materials, Ms. Huong said that an increase in petrol prices also causes all costs to increase. The price depends on input costs, when the adjustment of raw materials will create pressure on the output price, there will be an adjustment coefficient according to the increase of the input price.

Construction cost accounts for a proportion of house prices, but house prices also depend on a number of other factors such as technical value, investment value in utilities and services attached to the product.

Ms. Huong also said that because her unit often plans and signs contracts with strategic contractors in advance, it does not affect the project implementation progress. And if the investor sells first, then builds later, it will certainly be affected when input costs increase, and the expected profit will decrease, which will definitely affect the implementation progress.

According to Ms. Huong, if the price of raw materials continues to increase in the near future, the investors will be forced to adjust the business and construction investment plans of the 2nd and 3rd quarters and certainly. there will be price pressures, forcing them to be taken into account.

ID