Photo: pixaby.comAfter copper prices plunged sharply and to a 17-month low, the cost of iron, steel, and lumber also fell sharply, continuing the previous quarter's downward trend.
The price of copper, which is regarded as a leading indicator of the state of the global economy, dropped as much as 3.7 percent to $7,955 a metric ton in London. That represents a 20% decline in just three months, according to Bloomberg, which was the worst quarter in ten years.
The concern is how this decrease will impact the price per square meter, the construction boom, and the real estate market, which many believe is a "inflated bubble" that will eventually explode. Although it is now clear that prices are not declining, it appears that investors are being more cautious, which suggests that the real estate market's boom could subside, according to biznis.rs.
"Iron prices have dropped by 30 to 40%, but there is speculation of an increasing trend again, and nobody is certain if that will happen or not. The price of scrap iron in Turkey, on the other hand, has already climbed by 50 euros per ton, therefore there is a chance that it may increase once again,” says Tanja Aprcović Pejović, manager of the Kopaonik AD building materials warehouse.
She claims that in terms of the material, planks presently cost between 190 and 250 euros, with price variations of up to 20 percent depending on the supplier and the quality.
"And that holds true for the majority of construction. Prices have decreased by 20 to 30 percent with some producers, but not with others because they refuse to "lower" them when a ton of pellets costs 300 euros and they can grind it up and sell it that way rather than selling it to us for 190 euros ", continues Aprcović Pejović.
When asked how this situation affects demand, she replies that it is decreasing daily, indicating that investors are approaching building with caution since they are unsure of what will transpire.
The head of Kopaonik AD warehouse notes that there is now high demand for building supplies like as plaster, plaster products, wool, and roof tiles.
Some analysts predict that the decline in material costs won't have an impact on real estate costs, but that it will likely stabilize prices and stop them from rising further.
"Steel and building supplies saw a sharp increase in price in March as a result of a large portion of the resources coming from war-torn regions. However, the market is flexible and new supply routes have been discovered, so as a result of the overall supply disruption, material costs have now begun to decline ", says to biznis.rs Miloš Mitić, the City Expert agency's operational director.
According to him, investors followed the trend in March with an increase in prices per square meter, and at this moment it is difficult to predict whether they will start to fall.
"When the prices of materials started to jump and when investors raised their price per square meter, the old construction followed it regardless of the fact that these are apartments that have already been built and are absolutely not affected by the price of materials. This means that prices are being 'pumped' at an artificial level," he says.
Source: biznis.rs
