Source: Vientiane Times
People hoping to build a house this coming dry season will have to think twice now that the price of many construction materials on sale in Vientiane has risen sharply.
As the end of Buddhist Lent draws to a close each year, many people start to think that this is a great time to own a house and have one ready to live in a couple of months before the next rainy season arrives.
But some people who already own a house and have been doing some decorating or small-scale extensions say they have encountered high prices for materials such as steel, cement and other items.
The owners of construction material shops say the main reason for the rise in prices is that goods are purchased from neighbouring countries and have to be paid for in foreign currencies. Given the depreciating value of the kip, this means that imported goods are becoming increasingly expensive.
In addition, some of the raw materials and components needed for the manufacturing process in Lao factories are imported and so are also expensive, while the rising cost of logistics drives up prices even further.
For instance, a sack of Hongshi brand “green” cement produced by the Chinese-owned factory last month sold for 25,000 kip to 27,000 kip while “red” cement was priced at 35,000 kip per bag, with the retail prices being sold this week is at 30,000 kip for “green” and 37,000 kip for “red” respectively.
Compared to the same period last year, prices of all kinds of construction materials have risen slightly, including steel of all sizes and quality, both locally made and imported.
“Many of my friends have suggested that I stop construction because of the rising price of materials but I don’t want to give up now because I’m afraid my bank account will get depleted and the money will get spent on unplanned activities,” homeowner Mr Soulisack Phavady said.
“Prices of construction material will continue to increase higher this upcoming weeks after the End of the Buddhist Lent as people hoping to build a house or other construction projects,” a wholesale shop owner who asked not to be named told Vientiane Times on Tuesday.
Another reason for not suspending construction is because the contractor is charging lower rates right now, with workers saying they would rather have lower wages than no income at all during these difficult times.
This reflects the impact of the pandemic on employment, with large numbers of people now unemployed and having to limit household spending.
In Laos, many cement factories are producing cement to supply local market demand, with most being run by joint venture companies set up by Lao and Chinese investors.