Cost to build homes up 5.3%

Cost to build homes up 5.3%

Russia-Ukraine war blamed for Q1 rise

Steel rods at a construction site in Bangkok. The Russian invasion has resulted in a steel shortage in the global market.
Steel rods at a construction site in Bangkok. The Russian invasion has resulted in a steel shortage in the global market.

The average cost of constructing a home rose 5.3% year-on-year in the first quarter of 2022 as a result of the Russia-Ukraine war, according to Vichai Viratkapan, acting executive director of Real Estate Information Center.

Service fees in the category of construction design and system works increased, particularly for structural engineering.

Mr Vichai said the price of most construction materials had increased, especially steel and steel products, jumping by 35% year-on-year.

The price increase was mainly a result of the Russia-Ukraine war, which pushed up the prices of energy and construction materials, he said.

Russia and Ukraine are both major steel suppliers, accounting for a combined 14% of the global steel export market.

Russia is the world's third largest steel product exporter, while Ukraine is the eighth largest.

The Russian invasion has resulted in a steel shortage in the global market.

Mr Vichai said service fees for structural engineering surged 12% year-on-year and 5.4% quarter-on-quarter, while during the same periods fees for architectural work edged up 2.6% and 3.4%, respectively.

Service fees for building sanitary systems increased 2.2% year-on-year and 1.7% quarter-on-quarter, while during the same periods fees for electrical and communications systems rose 7.4% and 5.1%, respectively.

In terms of construction materials, wood and wood product prices rose 4.6% year-on-year and 7.8% quarter-on-quarter, while during the same periods concrete product prices surged 6.8% and 2.9%, respectively.

The price of steel and steel products jumped 35% year-on-year and 18.2% quarter-on-quarter, while during the same periods tile prices fell 3.2% and 3.4%, respectively.

The price of sanitaryware jumped 12.7% year-on-year and 13% quarter-on-quarter, while during the same periods the prices of electrical and tap water equipment rose 6.6% and 4.7%, respectively.

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