The Impact of Cement on Housing Costs is Only 4,5%

“The Impact of Cement and Ready Mıxed Concrete Prices on Houiıng Construction Costs Report-2022” Drawn up by METU Shared With the Public Opinion 

The “Impacts of Cement and Ready Mixed Concrete Prices on Housing Construction Costs Report” prepared by Prof. Dr. İsmail Özgür Yaman and Dr. Aslı Akçamete Güngör from Middle East Technical University (METU) has been made public. According to the report, the impact of cement prices on housing costs was calculated as 2,8% in luxury constructions, 4,5% in 1st class constructions, and 6,8% in 2nd class constructions in 2022.

The “Impacts of Cement and Ready Mixed Concrete Prices on Housing Construction Costs Report” drawn up by Prof.Dr. İsmail Özgür Yaman and Dr. Aslı Akçamete Güngör from Middle East Technical University (METU) in order to shed light on the future of the housing sector has been shared with the public opinion. 

In consideration of the most widely used 1st class constructions in Turkey, the impact of cement on the cost of housing construction varies between 3,6% and 5,4% as of 2022. This ratio was calculated between 2,7% and 3,2% in 2019. 

According to the report prepared upon the request of TÜRKÇİMENTO, the umbrella organization of the cement sector, the impact of cement prices on housing costs was calculated as 2,8% in luxury constructions, as 4.5% in 1st class constructions, and as 6,8% in 2nd class constructions on average as of 2022. These ratios were 1,85% in luxury constructions, 2,95% in 1st class constructions, and 4,40% in 2nd class constructions in 2019. 

In his assessment regarding the report, Prof. Dr. İsmail Özgür Yaman, Lecturer of METU Civil Engineering Department, said, “According to our studies, the new housing price index is only 9% higher than the non-new housing index. This condition is not the material and labor costs of the main parameters that affect the housing price index; it shows that there are macroeconomic parameters like financing, land, and housing interest.” 

Dr. Aslı Akçamete Güngör, Lecturer of METU Civil Engineering Department, said, “In the report, we aimed to attract attention to not only cement and concrete but also the impact of price increases in other building materials on housing costs." 

HOW TO CALCULATE THE CONSTRUCTION OF COST OF HOUSING?

In the assessments in the report, the impact of price increases in building materials other than cement and concrete on the cost of housing was also highlighted. According to the Construction and Installation Unit Prices published every year by the Ministry of Environment, Urbanization, and Climate Change, it was stated that the highest increase among the unit prices of various building materials used in housing construction in the last six years was 495%, while the lowest increase took place in cement by 158%.

It was underlined in the report of METU that the construction cost of houses consisted of a combination of different items and the following remark was included:  
“The costs, like the costs in relation to land acquisition, financing costs, marketing and sales costs, and contractor profit ratios are the main factors that need to be calculated outside the material prices used in the construction of a building and labor expenses and that affect the cost of a house. Thus, construction costs cannot be reduced solely to the cost of raw material/material use. In addition to the construction costs like production, assembly, formwork, scaffolding, equipment, and labor, other general expenses to be covered during construction are included in calculations.  

It was expressed that within the scope of the report, the impact of concrete and cement on housing costs was calculated by taking the highest concrete utilization rates and cement dosage higher than national standards into account.