The alerts in the real estate sector have been turned on due to the increase in the price of construction materials.

The phenomenon has come from a couple of years ago, but global inflation, derived from the pandemic and the recent conflict between Russia and Ukraine, has paid more for the rise.

Steel, for example, grew 65.67% in 2021 and in February of this year, fuels increased 8.49%.

People who plan to buy a home in a new development already see the impact, explains Gerardo Contreras, CEO of Century21, in the presentation of Citi, a real estate cluster that will promote the digitization of real estate: "the price of land plus the construction plus the return on investment (ROI) will generate a new price.

See also: Fed seeks to curb inflation in the US and raises interest rates by 25 basis points

New developments will be adjusted and you will see an increase of between 18% and 20%”, he explains.

Used housing will not be spared from the increase either. Although having been built outside the period of inflation, demand will bring prices closer.

“If you increase 20% (the value) because the material grew and there is no demand, that house is not going to be sold. But right now the requirement is high, since there has been a housing deficit for two years.

At Century21 we break record after record (for units sold). Today we have almost 50% more than last year”, details Gerardo Contreras.

Of interest: New mortgage loans will be affected by high interest rates

In 2021, the National Institute of Statistics and Geography (Inegi) said that there was a deficit of 8.2 properties to live in in Mexico, in addition to a demographic bonus with the majority of young people and an average age of 27 years.

This phenomenon has caused the price of housing with mortgage credit to grow 7.9% last year, data from the Federal Mortgage Society (SHF) indicate.

The increase will not harm real estate, considers the CEO of Century21, since the demand will persist, despite the increase in interest rates.

In Solili you can check apartments available in La Roma y La Condesa

Original note