Construction costs rise 16 pct monthly

ANKARA

The monthly increase in the headline construction cost index accelerated from 1.94 percent in December 2023 to 15.7 percent in January, data from the Turkish Statistical Institute (TÜİK) have shown.

The annual increase in construction costs, consequently, quickened from 67.31 percent to 67.87 percent, TÜİK said on March 13.

Labor costs in the construction sector surged nearly 42 percent month-on-month in January, which pushed up the annual increase to 103.5 percent.

The construction materials cost index rose 5.13 percent monthly and 53.3 percent annually.

The building construction cost index increased by 15.92 percent compared with the previous month and rose by 66.9 percent from January 2023.

In building construction, materials costs were up 4.82 percent in January from December 2023, while the annual increase was 42.35 percent.

Labor costs in building construction leaped 42.35 percent month-on-month, which brought the annual increase to 103 percent.

“The construction cost index for civil engineering increased by 14.99 percent compared with the previous month and increased by 71.1 percent compared with the same month of the previous year,” said TÜİK.

High construction costs translate into higher home prices, which depress demand in the housing market. 

Home sales declined by 17.8 percent in January from a year ago to 80,308, TÜİK reported last month.

That came on top of the 33.4 percent year-on-year decline recorded in December 2023. In the whole of 2023, home sales in Türkiye plunged 17.5 percent from the previous year to 1.23 million.