Spike in the costs of construction materials due to the war in Ukraine. Will property prices rise?

The war in Ukraine will also affect the construction industry, which means a spike in the prices of properties. The prices of materials used in the construction of buildings have gone up.

Bulgaria imports 70% of reinforcing iron from Ukraine and Russia, including that used in building and construction. However, the war, sanctions and restrictions are putting into question the supply.

"The second problem is that we lack the full range of these materials and have to replace some with other to keep the construction process on time," said Eng. Ilian Terziev, chairman of the Chamber of Builders in Bulgaria.

Eng. Georgi Shopov, chairman of the National Association of Building Contractors, said that the prices of reinforcement materials from 1.65 went up to 2.40, which is a huge increase.

This will also affect prices of properties, but by how much?

"I would refrain from specific comment on how much it can be expected for the prices to rise and should they?" said Anton Andonov, executive director of a real estate agency.

For builders, however, the increase is there. According to the National Association of Building Contractors, the price rise in construction in one year is 27%. Reinforcement immaterial prices went up by 60% , timber by 150%, thermal insulation between 40 and 60%.

There is another problem

"The delay in supply. At the moment, especially in the metals market, things are very tragic. There are companies that simply refuse to take orders," said Eng. Ilian Terziev.

According to him, import quotas from third countries should be reviewed. For Eng. Shopov, however, the solution is already on the way: "This is being offset by the world logistics, global logistics and economy, which does not tolerate vacuum and niches. Ships from all over the world have set sail with reinforcing materials for Europe."

But regardless of the stage of construction, the rapid rate of increase in the cost of materials will affect the final price of new buildings. And prices will be influenced by the rapid rate of increase in the costs of building materials.