Materials should start to decline the reduction in international prices of raw materials and shipping costs
The Dominican Association of Home Builders and Promoters (Acoprovi) expect the slowdown to reverse soon construction sectorsince materials should begin to decline due to the reduction in international prices of raw materials and shipping costs.
He also hopes that with the reduction in the growth rate of prices, the monetary authorities can order a release of the legal reserve for the benefit of the construction sector.
By participating in the TODAY Economic Meeting, George Montalvo, union president; Guido Rosario, Vice President Treasurer; Evelyn Rodríguez, executive vice president, and Santiago Colomé, first member, stressed that the sector has always been one of the engines of the Dominican economy.
Montalvo said that the raw material for steel, billets, has fallen in price in international markets in the last three months, although it has not translated into a reduction in the price of rebar in the country and he considers that the drop should occur from this month.
We invite you to read: Climate change and little financing threaten family farming
He pointed out that the reduction in freight rates has not translated into a decreased cost of imported materialsfor which he called on the material import sector to reflect them in the reduction of construction supplies.
He also trusts that there will be reductions in the price of the cement cover, a material of great importance in the sector.
As inflation fell slightly last July, he believes that this will happen in the coming days and the authorities of the central bank they should think about freeing up the legal reserve for the construction sector.
He considered that the conjunction of these elements would translate into a reduction in the housing cost index (ICV) and that it has risen by more than 40% since the beginning of the pandemic in 2020.
He noted that last year the sector had a growth of 23.4%, due to record low interest rates on loans for home developers and buyers. That was, she said, at a time when building materials were on the upswing.
He explained that this year, in addition to inflation, there has been an increase in interest rates, due to the restrictive monetary policy applied by the Central Bank to control the inflation.
He stressed that last Tuesday the central bank increased the interest rate from 7.75% to 8% and recalled that this measure has an important impact on the financing taken by promoters and long-term buyers.
He recalled that during this year the sector has begun to decrease its growth and recalled that the sector was at 6% in the first quarter, but in the January-July period it fell to 1.90%. That indicates, he points out, a slowdown in the sector and may lead to the sector registering zero growth.
You can also read: Pável Isa reiterates defense to resolution formalizes domestic work in the DR
However, he specified that if July 2021 is compared to July 2022, the sector would have a decrease of 4%.
Secondly, Acoprovi requested that the reference value for low-cost housing be updated. He hopes that in November that house can be indexed.
He indicated that low-cost home builders are tied to a price, because it has a cap. He proposed that instead of using the consumer price index (CPI) to update the value of low-cost housing, the ICV is used.
