For every ¢10,000,000 million that a family required last year to build a regular home, now requires ¢1,750,000 additional to build the same home. A 17.45% increase

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Randall Murillo, executive director for the Costa Rica Chamber of Construction says that the rise is caused by the rise in prices of international metals like iron, steel, and copper. Other products like fibrolit, ricalit, and the glass, have not increased.

Alejandro Coto president of the Association of House Builders, explained that it’s easier for the higher income buyers to absorb those increases however, companies that build homes for lower income buyers have been hurt more as they have to absorb much of those increases.

Projections. The behavior of the future prices depends on several factors, for example, the rise in the cost of metals respond to a bigger world demand in various products, especially from China and India.

According to the IMF, on 2005 the increase was about 4.8%, for the 2006 the IMF foresees an increase of about the 4.9% and for 2007? About 4.7%. Experts say that the only factor which can halt these climbing prices is if oil prices fall.

About The Indicators:

  1. Definition: The index of the prices allows monthly measurements of the changes in rpices of the components in a regular house.
  2. Base Year: 1976
  3. Covering: The geographic coverage of this index is San Jose, Alajuela, Cartago
  4. and Heredia including rural and urban zones.
  5. Materials: Refers to the basic materials for a regular house construction: wood, sand, concrete, iron, plywood, glass, electric wire, tubing, transportation, and labor (workers).
  6. Usage: Readjustment of construction contracts, and estimates of the costs per square meter.

Our thanks to Patricia Leiton and our friends at La Nación – Costa Rica’s largest Spanish circulation newspaper for their permission use this article.

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