Prices of building materials skyrocketing
23 November 2021 | Economics
Supply disruptions caused by the Covid-19 pandemic has resulted in prices on building materials escalating significantly. The materials that recorded the sharpest price increases are predominantly imported.
On average, building material costs account for more than 60% of the total cost for building a new residential house.
The First Capital Namibia house building cost index climbed solidly by 6.8% in September 2021, the 5-year highest price increase on building materials.
According to the report, a broad-based spike in prices of most building materials notably electrical, plumbing, tilling and steel materials was observed in September 2021 with a notable exception of cement prices that remained broadly unchanged due to muted demand pressures.
During the period under review, the prices of electrical goods were 8.7% higher compared to September 2020. In addition, sharp price increases were further observed on plumbing and tilling materials that equally import dominated.
Price of super bricks were 4.5% up in September 2021 compared to September 2020. The price changes of bricks largely reflect the average trend of sand and cement prices the key input components for producing bricks. Among the material inputs for super bricks, sand prices went up by 8.6%, while cement prices remained steady with a marginal growth of 1%, the report reads.
Overall, prices of building materials were 6.4% higher in September 2021 compared to September 2020.
The cost of building materials remains higher in northern parts of the country relative to central and southern parts.
The bill of quantity for building materials on a three-bedroomed standard house using September 2021 prices recorded a combined average of N$267 545 in Katima Mulilo, Ondangwa and Rundu while the same materials averaged N$265 595 in Keetmanshoop, Windhoek and Swakopmund representing a variance of N$ 1 950 in the cost of building materials within these two geographic locations.
The total cost of building materials in Keetmanshoop is N$2 950 less than the cost of identical materials in Katima Mulilo, the report added.
The differences in building materials cost by town reflects varying prices due to supply sources that are largely unique to every town. The price increase of building materials was lower in Swakopmund and Keetmanshoop relative to central and northern parts of the country a trend that reflects the impact of transport costs on geographic areas distant from major imports entry points.
Going forward, household debt is likely to continue mounting further through 2022 facilitated by accommodative monetary policy environment, the report pointed out.