Rising Prices of Building Materials are Starting to Show up in the Price Rising of New Apartments
Today we can observe a serious lack of building materials on the market. This is due to the disruption of the supply and demand chain.
During the pandemic, national borders were closed, which negatively affected the ability to purchase building materials. This caused shortages and led to an increase in the price of building materials by tens of percent. According to construction company representatives, the price of steel and insulation materials doubled and the price of wood products increased even more.
Representatives of the developer Skanska Reality say that clients who have already paid for flats that are still under construction will not have to pay extra for the increased cost of building materials. The developer will resolve the current situation with suppliers on its own. However, for projects where the start of sales has not yet been announced, the expected prices will of course be adjusted. Representatives of Central Group and AFI Europe announced that due to the lack of building materials, the contractors cannot meet the deadlines and the already agreed price. This leads to a slowdown in the pace of construction and an inability to calculate construction costs. The developers are announcing that they will be able to complete the construction of their complexes on time and there is no need to worry about delays in the commissioning of the apartments. But it is true that developers are forced to include the risk of rising prices of building materials in their planning and take it into account when setting future prices of apartments in projects under construction. In their opinion, this trend will continue for at least another year and will be reflected in higher housing prices in the near future. It should be noted that over the last 6 years the prices of new apartments have doubled. This was at a time when building materials were not as difficult as they are now, and at the same time mortgage rates were much higher than they are today. Obviously, if you are thinking about buying a property, now is the best time to do so, as prices will increase in the near future.
