House prices rise sharply with soaring steel prices
Apartment buildings seen in Ho Chi Minh City. Photo by VnExpress / Quynh Tran.
Rising steel prices could push apartment prices into double digits, further reducing the supply of affordable units, experts said.
Le Huu Nghia, CEO of Ho Chi Minh City-based property developer Le Thanh, said steel prices nearly doubled this year to VND 25-26 million ($ 1,085- $ 1,129) per ton . and sand prices have quintupled over the past five years.
With construction costs typically being 60-70% of the price of an apartment, rising materials prices would increase it by 18%, he said.
“It is impossible for apartment prices to go down.”
This could lead to the total decrease in the supply of affordable apartments, priced at VND 25 to 30 million per square meter, he warned.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said homebuyers have to bear the brunt of rising prices, but contractors would face losses and even bankruptcy if their contracts were secured. .
“The best solution now is for developers and contractors to share the increasing costs.”
Other experts said large infrastructure projects like Long Thanh International Airport and the North-South Highway are expected to increase demand for steel.
Industry insiders have said growing demand for steel around the world, but especially in China, as economies recover from Covid, is pushing up prices.