LÊ TÙNG CONSTRUCTION’S PERSPECTIVE
The skyrocketing price increases of steel, construction sand, cement, and ready-mix concrete are causing significant difficulties for individuals planning to build homes and for construction contractors. From the perspective of an architectural design and turnkey construction expert, Lê Tùng Construction proposes smart technical solutions (Value Engineering) and optimal alternative material choices to help homeowners save 10% to 15% of their total budget while fully maintaining structural integrity.
The rapid increase in construction material prices recently has forced many individuals and businesses to bear significantly inflated costs.
In early March 2026, Mr. and Mrs. Nguyễn Văn Dũng (Ba Vì commune, Hanoi) began constructing a house on land inherited from his parents. They had estimated the cost to be around 2.4 billion VND. However, as soon as construction commenced, the supplier reported an increase in the price of construction bricks from 1,800 VND/piece to 2,100 VND/piece.
Prices of shaped steel, sand, gravel, and cement are continuously escalating, posing significant challenges to construction budgets.
Similarly, the price of construction sand (black sand) also increased from 470,000 VND/m³ to 570,000 VND/m³. Meanwhile, the price of yellow sand rose from 750,000 VND/m³ to over 800,000 VND/m³.
Prices of other common construction materials such as cement, steel, and commercial concrete (ready-mix concrete) also increased significantly, derailing the initial financial plan estimated by Mr. and Mrs. Dũng.
For example, the price of M300 concrete increased from 1.2 million VND/m³ to 1.46 million VND/m³; steel prices rose from 16,000 VND/kg to 16,800 VND/kg; and plastering cement increased from 1,500 VND/kg to 1,600 VND/kg,…
“
My wife and I are very worried about the construction costs increasing too much. If we continue building, our savings won’t be enough, but if we stop, the project will be unfinished, and we don’t know when it will ever be completed, then we’ll have the worry of settling down
”, Mr. Dũng shared.
According to Mr. Dũng’s calculations, the inflated cost due to the increase in construction material prices is about 200 million VND.
Similarly, Ms. Lê Thị Mai and her husband (Hoàng Mai ward, Hanoi) were anxious when construction material prices suddenly surged while they were building their house. Earlier this year, they broke ground on a 2-story house on a 90 m² plot. At that time, Ms. Mai purchased sand at 450,000 VND/m³. She estimated it would take 10 months to complete the house with a budget of about 2 billion VND.
The Reality of Soaring Steel, Cement, and Concrete Prices
However, since mid-March, sand prices have increased to 570,000 VND/m³. Additionally, prices for other construction materials such as bricks, steel, and cement have also risen. Re-calculation shows that the cost of Ms. Mai’s house under construction has increased by at least 300 million VND.
According to Ms. Mai, many people built houses right after Tết, and around her area alone, eight houses were under construction, with everyone worried about the sharp increase in material prices.
“
Our family planned to build the house with that much money, but now the cost has increased due to rising construction material prices, so we have to borrow from relatives to complete it soon. We just hope prices don’t continue to rise
“, Ms. Mai confided.
Not only individuals but construction businesses are also concerned about high material prices. Mr. Phạm Công Thảo, Deputy General Director of Việt Nam Steel Corporation, stated that production costs have increased by approximately 50,000 – 100,000 VND/ton due to rising oil prices. Concurrently, imported iron ore and scrap prices have also escalated, putting pressure on product costs.
Nevertheless, Mr. Thảo also stated that steel enterprises are actively stocking raw materials to ensure supply, while also recommending conditions for maximizing operating capacity to reduce costs and enhance production efficiency.
Mr. Nguyễn Thành Tâm, Director of IGcons, shared that the sharp increase in construction material prices recently is creating significant pressure on businesses in the industry, especially in the civil construction segment. With the characteristic of turnkey contracts, as in his company, many contractors are forced to accept reduced profits, or even “work for free” to maintain reputation.
According to Mr. Tâm, this wave of price increases is not only widespread but also prolonged and continuous, causing businesses many difficulties in cost control.
“
In most signed contracts, we still maintain the original prices, despite actual costs increasing sharply. If prices were adjusted, businesses might reduce pressure, but they would lose customer trust
“, Mr. Tâm said.
Construction Contractors and Residents Face Difficulties
Mr. Tâm also stated that, in addition to being affected by input material prices, townhouse projects in Hanoi also bear additional transportation costs due to the specific nature of construction in narrow alleys. Most projects are located in densely populated residential areas, where large trucks cannot directly access. Materials must be transshipped multiple times using smaller vehicles or manually transported, significantly increasing logistics costs.
Notably, even a slight increase in fuel prices leads to a sharp rise in transportation costs, making the actual material prices at construction sites much higher than the general market level.
In this context, according to Mr. Tâm, construction businesses are forced to change their operating methods. His company has implemented several solutions such as optimizing construction processes, tightly controlling costs, working directly with suppliers and proactively stocking materials.
Concurrently, for new contracts, businesses are beginning to add clauses for price adjustments based on market fluctuations to mitigate risks.
Mr. Lê Hoàng Châu, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), analyzed: Material costs typically account for about 60-70% of total construction costs; therefore, even a short-term increase in material prices can disrupt the financial equation of many projects.
In the long term, without solutions to control costs and stabilize the market, price increase pressure could affect people’s access to housing, while also diminishing the attractiveness of the investment environment.
Given the recent sharp fluctuations in construction material prices, Mr. Trần Chủng, Chairman of the Vietnam Association of Road Traffic Project Investors (Varsi), stated that the association has recommended the Government and relevant agencies consider and direct the implementation of several solutions to alleviate difficulties for businesses.
Specifically, there is a need for measures to stabilize fuel and construction material prices; to expedite the update and announcement of construction price indices, ensuring they are close to reality, serving as a basis for contract adjustments.
Technical Solutions to Optimize Construction Budgets
Varsi also proposed allowing contract price adjustments for projects significantly affected by price fluctuations, to share risks between the State and businesses. Additionally, it is necessary to consider extending deadlines for projects facing objective difficulties regarding material and fuel supply.
Mr. Nguyễn Quốc Hiệp – Chairman of the Vietnam Association of Construction Contractors (VACC) also proposed a group of five solutions to the authorities.
Firstly, the association proposed allowing for the calculation of fuel cost difference offsets in construction estimates, bid package prices, and construction contract prices. This is considered an urgent solution to ensure cost balance between the contracting party and the contractor amidst sharp fluctuations in fuel prices. VACC suggested applying this offset mechanism from March until fuel prices stabilize.
Additionally, the association also recommended that authorities implement appropriate mechanisms to stabilize transportation costs – a factor directly affected by fuel prices. Stabilizing transportation costs is expected to help contractors better control input costs, especially for projects using large volumes of bulk materials such as sand, stone, and fill earth.
Another solution emphasized by VACC is to strengthen the control of local construction material prices, especially for bulk materials like sand and stone. The association urged local authorities to strictly penalize cases of exploiting market fluctuations to unreasonably increase prices, causing difficulties for construction businesses.
In cases of prolonged fuel price fluctuations due to objective factors such as international conflicts, VACC also proposed considering the application of force majeure provisions to adjust construction contracts. This would provide contractors with a legal basis to adjust costs, avoiding losses when executing contracts amidst sudden cost increases.
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Original article source: CafeF
