The prices of both locally made and imported cement have increased sharply since the first week of October.

Rise in construction prices challenge for house owners

The prices of all types of construction materials have sharply increased compared to the same period of last year, especially the rates of cement sold at wholesale and retail shops in Vientiane and other provinces.
Traditionally, people in Laos plan to build and expand their homes after the End of the Buddhist Lent as it is believed that the dry season is the best time for house-owners to begin new construction after the wet season.
However, the spike in the prices of materials has become an issue for house-owners, with many reconsidering their construction plans or suspending them.
“In fact, I planned to build a house after the End of the Buddhist Lent this year, but I recently checked the prices of construction materials with several shops, and the cost of items such as cement and steel are still high,” Mr Somboun Silachanh, a resident of Hadxaifong district, said recently.
He said his plans to build a small house for his family had to be suspended several times over the past two years because of the Covid-19 pandemic.
“It is difficult to decide whether this is a good idea to begin the construction this season, when the prices of all kinds of construction materials are still skyrocketing. Maybe I will have to postpone my plan for the years ahead,” he said.
The owner of a wholesale shop for construction materials in Hadxaifong district said the green cement of “Hongshi Brand”, a locally produced item, is sold for 950,000 kip per tonne while red cement is sold at 1,060,000 kip per tonne.
The “SCG brand” green cement  imported from Thailand is sold for 1,080,000 kip per tonne and the red cement is sold for 1,100,000 kip per tonne.
“The prices of all types of cements have increased by 100,000 kip per tonne each since the End of the Buddhist Lent, but I’m not quite sure about the reason for the price hike. I only guess that it is because of the dry season, which is the time for building houses,” the shop owner, who did not want to be named, said.
She said the prices of green and cement were about 500,000 kip to 600,000 kip per tonne last year, and there has been a significant increase when compared to the rates during the same period of last year.
“It is perhaps because some of the raw materials and components needed for the manufacturing process in Lao factories are imported, and the unfavourable exchange rates and the rising cost of logistics are the real causes for the increase in prices of all kinds of construction materials, including all sizes of steel bars and rods,” she said.
Steel bars of different sizes and diameters are used in constructing houses, including 6mm, 10 mm and 12 mm, and the prices are dependent on the size of the bars.
The steel bar of “the VSI brand” is popular and the retail price for 6 mm bars is 35,000 kip per bar, while 10 mm bars are priced at 80,000 kip per bar and 12 mm bars are sold for 110,000 kip per bar.
As the prices of many construction materials have risen sharply, people with limited budgets will think twice about building a house or making small-scale extensions to existing homes in this year’s dry season.
Economists say the main reason for the rise in prices is that raw materials and finished goods are imported from neighbouring countries and have to be paid for in foreign currencies. In addition, the depreciating value of the kip will continue to fuel the prices of both locally made and imported goods. 

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By Times Reporters
(Latest Update October 14, 2022)