Construction costs report modest growth in Q3: INSTAT

Construction costs increased for the fifth consecutive quarter, but, however, growth remained at very low levels.

According to data from the Institute of Statistics, the housing cost index for the third quarter of 2017 increased by 0.5% year-on-year.

For the third quarter, growth is even lower compared with the growth of 0.8% in the second quarter.

Though still in modest value, construction costs are steadily rising since the middle of last year.

Growth, however limited, has been largely determined by the group of material expenditures and by a higher increase in wage expenditures.

For the third quarter, material costs increased by 1.3%, driven primarily by an increase in construction materials.

Salary expenditures also recorded an annual growth of 1.6%, which is however lower than in the second quarter.

The element that is giving a balancing effect on construction costs is the transport costs, which remain in negative values.

The Transport Expenditure Index fell by 1.4% in the third quarter.

However, the fall in this spending group is narrowing, owing to a slow rise in fuel prices.

For the moment, rising housing cost is too weak to exert pressure on sales prices.

Offer elements are still not decisive in the market, while agents signal a rise in prices especially in suburban areas of the capital, where the demand is also higher.

SCAN

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