Construction Material Price Increase: A Simple Guide for Real Estate Buyers

House construction

Today, the Philippine construction industry is facing a significant challenge – the increase in construction material prices. The global pandemic has affected the supply and demand of raw materials, resulting in price surges that have left developers and contractors struggling to keep up with their projects’ costs. This phenomenon, known as the material price growth effect on real estate, has a significant impact on the industry, especially for homebuyers and investors. In this article, we will provide a simple guide for real estate buyers to understand the construction material price increase.

What is causing a price increase in construction materials?

The shortage of raw materials caused by the pandemic has led to an increase in production and transportation costs. The implementation of safety measures, social distancing protocols, and reduced workforce capacity have also slowed down the manufacturing and delivery of materials, resulting in delays and backlogs. The limited availability of these materials and the rising demand for them have given suppliers and manufacturers the leverage to increase their prices, as the market becomes more competitive.

Moreover, the increasing demand for construction materials is not limited to the local industry but is also affected by the global market. Other countries, such as the United States and China, have also experienced a surge in demand due to their own infrastructure projects and housing needs. This trend further increases the competition for raw materials, causing a domino effect that eventually trickles down to the Philippine construction industry.

The inflation rate also plays a significant role in the construction material price increase. The high inflation rate affects the prices of goods and services, including construction materials. The increase in construction material prices can be attributed to the cost of production, transportation, and distribution, as well as the increase in labor and overhead costs.

The construction material price increase has had a significant impact on the real estate industry, affecting the cost of building and buying properties. Real estate developers and contractors have to adjust their budgets and timelines to accommodate the price surges, resulting in delays and higher construction costs. This phenomenon has made it more challenging for buyers to afford properties, especially for those who are looking for affordable housing options. To further understand the factors that affect the cost of construction materials, you may refer to the article below:

Read Article: 7 Basic Factors that Affect the Cost and Usage of Construction Materials

In the next section, we will discuss the effects of construction material price increase on real estate buyers and how they can prepare for it.

What is the material price growth’s effect on real estate?

1. Increase in Property Prices

The increase in the cost of construction materials directly affects the cost of building a property. As a result, property developers and builders pass on the additional costs to the buyers, resulting in higher property prices. This can be seen across the board, from low-income housing to high-end luxury properties. In turn, this makes it harder for homebuyers to afford a property, which may reduce demand in the market.

2. Delays in Construction

Price increase and shortages of construction materials can cause delays in construction projects, prolonging the waiting time for real estate buyers. These delays may lead to additional costs due to interest on loans, storage, and labor costs. For developers, these delays may also lead to lower profits or even losses, especially when the project is stalled for an extended period.

3. Shifting Market Demands

In response to the rising cost of construction materials, property developers and builders may shift their focus to constructing high-end properties that can generate higher profit margins. This shift in market demand may result in a reduction of affordable housing in the market, which may negatively impact low to middle-income earners. It also means that real estate buyers who are looking for affordable properties may have fewer options, which may lead to longer search times or settling for properties that do not meet their needs.

4. Decrease in Property Value

The increase in construction material prices may also result in a decrease in property values. In some cases, property developers may choose to cut corners and use lower quality materials to keep costs down. While this may result in lower property prices, it may also lead to lower-quality buildings and structures that may not be able to withstand the test of time or have a shorter lifespan. Additionally, properties that are built with lower quality materials may have a harder time getting sold in the future, especially in a market that prioritizes quality and sustainability.

5. Financing Challenges

For real estate buyers who need financing to purchase a property, the increase in construction material prices can create additional challenges. Higher property prices may mean that buyers need to apply for larger loans, which may be harder to secure or come with higher interest rates. Additionally, delays in construction projects may mean that buyers have to wait longer to move into their new homes, which can also create additional financial burdens in terms of rental payments and other expenses.

Getting Ready For Construction Materials Price Surge

1. The Importance of Pre-Approval

As a real estate buyer, it is crucial to be pre-approved for a loan. This process will give you an idea of your borrowing capacity, which can help you set a realistic budget for your property purchase. In addition, pre-approval can help you lock in the interest rate, shielding you from any possible interest rate hikes in the future.

2. The Significance of Research

Researching the market trends and the cost of construction materials can help you make informed decisions when buying a property. It would be best to consider the current state of the market and the potential impact of construction material price growth on property prices.

3. Be Flexible and Patient

Be prepared to adjust your expectations as the cost of construction materials rises. Consider looking for properties that have already been built or those that use alternative construction materials that are more affordable. Additionally, be prepared for possible delays in construction due to the current supply chain disruptions.

4. Consider Alternative Financing Options

In response to the increasing cost of construction materials, real estate buyers may need to consider alternative financing options such as home renovation loans, construction loans, or affordable housing loans. These options may offer more flexible terms and rates that can help you afford your dream home.

5. Understanding Market Cycles

Real estate markets are cyclical, with periods of boom and bust. Understanding the current state of the market and the phase of the cycle can help you make informed decisions when investing in real estate.

Bria Homes: A Positive Solution to Construction Material Price Increase

Despite the challenges posed by the increase in construction material prices, Bria Homes remains committed to providing quality homes that are affordable for low to middle-income earners. Bria Homes has been making strides in the real estate industry by utilizing alternative construction materials that are more cost-effective without compromising quality.

Bria Homes also offers alternative financing options such as in-house financing, rent-to-own, and Pag-IBIG financing to make home ownership more accessible for everyone. In addition, Bria Homes’ properties are strategically located in areas that offer convenience, accessibility, and potential growth.


Construction material price increase has a significant impact on the real estate industry, affecting the cost of building and buying properties. Real estate buyers need to understand the effects of material price growth and be prepared to adjust their expectations and look for alternative financing options. However, with the help of trusted developers like Bria Homes, home ownership remains within reach for many Filipinos.

Bria Homes is committed to providing affordable and high-quality housing solutions despite the challenges posed by the construction industry’s rising costs. With a range of affordable house and lot packages located in strategic locations across the country, Bria Homes offers Filipinos the opportunity to invest in their own homes and build a brighter future for their families. Furthermore, Bria Homes also helps to continue to push for Philippine economic growth making sure that Filipino families not only have an access to an affordable home but also to a bright future.

Read Article: BRIA Homes continues to help drive economic growth in the Philippines

Indeed, the construction material price increase poses a challenge for the real estate industry and homebuyers alike. However, understanding the factors that contribute to this increase and being prepared to adapt can help mitigate its impact. By exploring alternative financing options and seeking the help of trusted developers like Bria Homes, owning a home can still be a reality for many Filipinos.

Written by AJ Caputolan