Many property projects saw investment costs upwardly revised on the back of soaring input expenses.
For example Capitaland-Vista’s apartment and trade services development $90 million price tag has climbed to $125 million, up $35 million or 39 per cent, in the past few years due to escalating building materials, manpower and construction services or input costs.
In Hanoi, Indochina Plaza Hanoi in Cau Giay district’s Dich Vong ward also saw investment costs more than double from $67 million to $146 million.
Foreign Investment Agency figures show that from early 2012 until March 20, 2012 29 projects, both foreign and domestic investment, asked for a total supplemental capital of $368 million.
The Hanoi Times Tower project, developed by PetroVietnam Premier Recreation Joint Stock Company (PVR), saw its investment rising from VND1.454 trillion ($69.2 million) to VND1.788 trillion ($85.1 million).
Developer PVR has attributed surging investment to higher input costs such as building materials up 18-25 per cent in price.
Nha Vui’s general director Nguyen Thu Phong assumed growth of building materials price had surpassed that of inflation, putting property developers into a pickle.
“The first quarter consumer price index was reined in but the price of housing and building materials group soared as labour costs picked up 20 per cent,” said Phong.
Housing construction cost now averaged VND7 million ($330) per square metre, including VND3 million ($140) per square metre for frame construction, VND2.5 million ($120) in finishing stage and around VND1.5 million ($71) for interior, according to Phong.
Constrexim Housing Investment and Development director Nguyen Duc Cay said in 2011 building materials was up 34 per cent in price and manpower cost up more than 50 per cent while many properties remained unsold, pilling mounting pressures on developers.