Property development cost on the rise

The development cost for commercial and residential properties may rise due to the increase in the prices of building materials in the medium term, a property services firm said.

“With both the public and private sectors advancing their construction activities, with the resumption of works in public infrastructure and real estate developments, the construction industry is poised to see sustained growth despite the rising building materials cost,”Cushman and Wakefield Philippines said in its latest property market news report.

“With supply lagging compared to demand due to a number of external factors, the price of building materials could face an upward pressure at least in the medium term, translating to an increase in the development cost of commercial and residential properties,”it added.

The wholesale prices of building materials in the National Capital Region (NCR) continued to increase in April as the country’s capital remains under the most lenient Alert level 1.

Latest figures from the Philippine Statistics Authority (PSA) showed that the Construction Materials Wholesale Price Index (CMWPI) in NCR accelerated to 6.9 percent in April from 6.6 percent in March.

Fuels and lubricants registered the highest increase at 41.7 percent.

This was followed by reinforcing and structural steel which grew by 11.2 percent.

Annual increases were also registered in the indices of sand and gravel, hardware, lumber, doors, jambs, and steel casement, plumbing fixtures and painting works.

Slower-paced increments were also registered in the indices of plywood, electrical works and PVC pipes.

In contrast, the index of tilework posted a 0.4 percent decline during the period.

“The indices of the rest of the commodity groups either retained their previous month’s positive annual growth rates or had zero percent annual growth during the month,”the PSA said.