House prices forecast to increase after steel
Real estate developers
raised these concerns after the Ministry of Industry and Trade (MoIT)
announced additional tariffs to be levied on imported steel products as of
Tuesday. - Photo vov
NỘI (Biz Hub) - The cost of building houses is expected to increase due to
the recent rise in steel prices, which will in turn likely cause a spike in
home purchase prices.
Real estate developers raised
these concerns after the Ministry of Industry and Trade (MoIT) announced
additional tariffs to be levied on imported steel products as of Tuesday.
This is a temporary safeguard
measure against inexpensive imports that were said to be threatening the
Under the new decision, the
import tax imposed on steel billets would increase from 10 per cent to 23.3
per cent while the tax imposed on long steel products would rise to 14.2 per
cent from below 5 per cent.
With the new tariff, steel
prices are expected to increase by three per cent.
Nguyễn Thế Điệp, deputy
chairman of the Hà Nội Real Estate Club, said the prices of steel and cement
account for 40 per cent of a real estate project’s construction costs, and
thus the hike in steel prices will definitely lead to a surge in house prices.
Property developers whose
projects are in the first stage of construction would be the most affected,
Nguyễn Viết Hải, general
director of the VIC Investment Joint Stock Company, said that over the past
few days, the company had to purchase steel at higher prices.
Steel is the most important
material for construction projects, and the hike in building costs would
force investors to adjust prices for the final products to gain profits, Hải
However, housing developers
are unsure how long the price hike will last.
Hải said that decisive
factors involving house prices were not only materials, but also labour costs
and demand. In addition, the safeguard measure will only be in effect until
When prices increase, demand
might fall because people tend to wait until prices drop, he said.
Economic expert Ngô Trí Long
said the rise in house prices is predictable, but how long the steel price
hike would affect the market is hard to say because it depends on the
relationship between supply and demand. - VNS