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Article by: info@apuscondo.com (Jason Payne) Published: 01/05/2010

Phuket Construction Prices

The home construction index (HCI) in the first quarter edged down to 127.7 from 127.9 points in the same period last year as oil and steel prices eased, said Samma Kitsin, director-general of Real Estate Information Center (REIC).

The construction materials index, a separate gauge compiled by the Commerce Ministry, soared from 135.2 in 2007 to 158.4 in 2008, a record since the base year of 2000, he said.

The HCI index rose by up to 11.5 points a year from 2000 to 2007. In 2008 it then climbed 23.2 points, or 17.2% year-on-year. But it plunged by 20.8 points, or 13.1%, last year as global recession took hold. "In 2008, prices of main construction materials - steel and fuel - rose the highest," said Mr Samma. "The big jump in their prices started in the second quarter of 2008 but started to decline in the fourth quarter of that year onward."

He said the HCI rose each year in line with the construction materials index. But since 2003 the HCI has risen less than the construction materials index.

"The HCI fluctuates less than the construction materials index as steel accounts for about 26% in the construction materials index estimation but only 7% in the HCI calculation," he added.

Mr Samma said HCI tended to increase in line with world steel prices but competition in the homebuilding business and minimum wages are major factors that limit an increase in the HCI.

The HCI was prepared by REIC and the Home Building Association with the first release for the first quarter of 2010. Data used to calculate the HCI covered only Bangkok with an assumption of a 180-day home-building period. Building prices include operating expenses and value added tax but exclude land costs and land development costs.

The standard home model for HCI calculation was a two-storey single house with a total useable area of 169 square metres on a plot of 64 square wah. But the HCI should not be applied to estimate the movement of housing construction costs in a housing development project.

The index covers costs of five construction jobs: structural engineering, architecture, sanitation systems, electricity, and communication system and others. "By mid-year, we will join Thai Condominium Association to produce a condominium price index," he added.

 

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