42% Increase Recorded in Construction Costs

The Construction Cost Index, calculated on a monthly basis by TÜİK, increased by 2.89% compared to the previous month, and by 42.48% compared to the same month of the previous year. This was the largest cost index increase recorded in its history.

The Construction Cost index, which approached 40% in September 2018 due to a currency impact, broke the record with 42.48% in June. The Material Index increased by 4.23% compared to the previous month, while the Labor Index decreased by 0.40%. The increase in construction costs began to be reflected in housing prices.

Nazmi Durbakayım, president of the Constructors Association, stated that this year’s 42.4% increase in construction material was just the tip of the iceberg, and said, “In fact, the cost increase is already above 100%. We, the builders, strived for absorbing most of the cost increases so that it would not add fuel to inflation and house prices would remain accessible. Our efforts in ongoing projects bore its fruits.”

Increase in import unit value increased the costs

According to the Construction Materials Industry Foreign Trade Index prepared by Turkey IMSAD — Association of Construction Material Producers, the unit value of exports per kg in the sector is $0.49, while the unit value of imports per kg is $2.56.

Additionally, construction material exports, which reached $2.89 billion in June, has been the highest monthly export volume since August 2013, when the index was first prepared.