The recent 12 per cent increase in the price of locally produced cement could begin to take its toll soon on the construction sector with a significant hike in building costs.
It might also take some time before the galloping prices in the real estate market are brought to a halt as construction costs continue to influence property value.
Chairman of the Construction Industry Council, Michael Robinson, told The Gleaner/Power 106 News Centre yesterday that building cost escalations are likely to be substantial given the extensive use of the product in the industry.
Increase in housing price
Mr. Robinson, who is also a quantity surveyor, argued that the jump in the price of cement would not only affect overall construction cost, but ultimately an increase in the price of houses.
According to Mr. Robinson, the cost of cement impacts on a substantial portion of construction.
“The rendering of the wall is an expensive finish, the tiling, you have to use a cement-based material as well as blocks,” he added.
The CIC chairman, however, was unable to say by how much the general costs would rise as assessments are still being done to determine the price at which cement is being sold in the market. The announced increase in the price of local cement by Carib Cement Company means that a bag of the product will now be sold at a base price of $370.
Managing director of Hope Codlin and Associates (Realtors), Hope Codlin, says a number of factors, including a sharp rise in building costs, are contributing to an escalation in the price of houses on the market.
Other factors contributing to higher prices on the real estate market, particularly in the Corporate Area, include a shortage of land and the devaluation of the Jamaican dollar, which directly impacts the cost of imported kitchen and bathroom fixtures.
Director of C.D. Alexander Realty, Dr. Ralph Thompson, told The Gleaner that the recent increase in the price of cement might result in an estimated five per cent increase in construction costs.