Housing prices to rise sharply as steel prices surge
Housing prices to rise sharply as steel prices surge
Rising steel prices could increase apartment prices by double digits, further reducing the supply of affordable units, experts said.
Apartment buildings seen in Ho Chi Minh City. Photo by VnExpress/Quynh Tran.
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Le Huu Nghia, CEO of Ho Chi Minh City-based housing developer Le Thanh, said steel prices have nearly doubled this year to VND25-26 million ($1,085-1,129) per tonand sand prices have quintupled in the last five years.
With construction costs typically accounting for 60-70 percent of an apartment’s price tag, the rise in the prices of materials would increase it by 18 percent, he said.
"It is impossible that apartment prices will fall."
This could cause the dwindling supply of affordable apartments, priced at VND25-30 million per square meter, disappear altogether, he warned.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said home buyers have to bear the consequences of the rising prices, but contractors would suffer losses and even bankruptcy if their contracts are fixed.
"The best solution now is for developers and contractors to share the rising costs."
Other experts have said that major infrastructure projects like the Long Thanh International Airport and the North-South Expressway are set to increase demand for steel.
Industry insiders said the rising demand for steel globally, but especially in China, as economies recover from Covid, is pushing prices up.
