Construction costs continue to rise

ANKARA

The monthly increase in the construction cost index accelerated from 1.57 percent in September to 3.44 percent in October, data from the Turkish Statistical Institute (TÜİK) have shown.

The annual rise in the index, however, eased 119.8 percent to 117 percent.
Construction material costs were up 3.88 percent for an annual increase of 128 percent, while labor costs rose by 1.94 percent in October and the annual increase reached 85.7 percent.

The building construction cost index rose by 3.1 percent month-on-month and went up by 114 percent compared with the same month of the previous year.

The cost of materials used in the construction of buildings increased by 3.49 percent in October from September and climbed more than 125 percent from October last year.

Labor costs in building construction grew by 1.9 percent month-on-month and 86 percent year-on-year.

High construction costs are one of the reasons behind the skyrocketing property prices, which in return depressed demand for houses.

The Central Bank reported earlier this month that the residential property price index (RPPI) climbed 189 percent in September from a year ago in nominal terms.

In real terms, the residential property price index grew by 58 percent, while the monthly increase in the RPPI was 4.9 percent.

House sales in Türkiye plunged 25 percent on an annual basis to 102,660 in October, while sales exhibited an annual increase of 6.7 percent in January-October to 1.16 million.

TÜİK and the Central Bank will release new data on house sales and property prices later this week.