LÊ TÙNG CONSTRUCTION’S PERSPECTIVE
The storm of rising construction material prices and increasing labor costs is creating fierce market culling in the real estate sector. Smart cash flow from homebuyers is strongly shifting towards apartments nearing handover or those with completed structures. Lê Tùng Construction recognizes this as an inevitable trend, requiring project developers to select reputable contractors with strong financial capacity and optimal progress management solutions to ensure on-time completion as committed.
Escalating material costs are putting pressure on house prices. In this context, buyers tend to shift towards projects nearing handover to minimize price and progress risks.
Rising input costs, house prices face increasing pressure
Pressure from rising input material costs forces investors to optimize completion progress.
According to the Ministry of Construction, rising fuel prices have led to an increase in the cost of several construction materials. As of March 31, the increase in fuel prices created a chain reaction pressure on production costs and transportation costs for most construction materials compared to February 2026.
Specifically, cement increased by over 7%; steel by over 2%; floor tiles by nearly 5%; and sand, stone, and brick materials by 13.5 – 23.3%. Asphalt prices, in particular, surged by nearly 32%.
The Ministry of Construction predicts that construction material prices will continue to rise in the near future. The increase in fuel (gasoline/oil) and construction material prices has directly impacted the investment costs of construction projects, especially key transportation infrastructure.
It is estimated that, with the aforementioned fluctuations in construction material and fuel (gasoline, oil) prices, construction estimates for projects are projected to increase by 1.91 – 8.09% (depending on the type of construction) compared to February 2026.
For real estate projects, Mr. Nguyễn Văn Đính, Vice Chairman of the Vietnam Real Estate Association, stated that construction material costs currently account for approximately 50% of the total construction cost of a project. Therefore, along with market supply-demand factors and land prices, fluctuations in construction material prices are one of the critical factors impacting house prices. If the rising material prices persist, cost pressure will make it difficult for house prices to decrease in the near future.
The Storm of Construction Material Prices and Pressure on Investors
Concurring, Mr. Trần Xuân Lượng, Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute, also believes that when input costs rise, product prices also face upward pressure. However, whether house prices increase sharply depends on many other factors such as market purchasing power, credit policies, project supply, and investor sentiment. If not regulated appropriately, the biggest risk is that homebuyers – the end consumers – will bear most of this increased cost.
From the perspective of a veteran real estate broker, Mr. Nguyễn Hải Minh (Ho Chi Minh City) said that when input costs increase, the profit margin of project development companies narrows, forcing them to recalculate financial plans, and even adjust selling prices in subsequent stages.
According to him, cost pressure is not just about selling prices but also directly affects implementation progress. “Some projects tend to delay progress or are more cautious when launching new products, to avoid risks in a context of unstable costs,” Mr. Minh noted.
From market realities, he believes that homebuyers in future-formed projects are facing many uncertainties. The most obvious is the potential for prices to increase with each sales phase, as input costs show no signs of cooling down. Additionally, there is time pressure. Buyers might have to wait one to several years to receive their homes, and this period always carries inherent risks regarding progress and market fluctuations.
In this context, according to Mr. Minh, buyer sentiment is gradually shifting towards a more cautious approach, prioritizing projects nearing handover. One of the biggest advantages of projects nearing handover is limiting cost fluctuation risks. As the project has reached its final stages, most construction costs have been “locked in,” thereby minimizing the possibility of price adjustments compared to projects implemented from the beginning.
Projects nearing handover are increasing their appeal to buyers.
From a buyer’s perspective, Mr. Minh noted that this trend is quite evident through actual customer behavior. One of his clients, after researching many projects in the market, decided to invest in an apartment at the Maison Grand project, located in the center of Phu My, on National Highway 51 (Ho Chi Minh City). The reason for the client’s decision was that the project is nearing handover (expected to be completed and handed over by the end of Q2/2026), which significantly shortens the waiting time compared to many other projects.
Trend of Cash Flow Shifting Towards Structurally Completed Apartment Projects
“Customers highly appreciate being able to see the actual progress and clearly determine the handover time. In the context of fluctuating construction costs, they prioritize products that are nearing completion to mitigate risks,” Mr. Minh stated.
Besides the time factor, the ability to put the asset into operation early is also a consideration. With apartments nearing handover, buyers can proactively plan to use or rent them out immediately after receiving the property, instead of prolonged waiting.
It is clear that amidst fluctuating material prices, the market trend is leaning towards projects with clear progress and specific handover times – a factor increasingly prioritized by buyers when making decisions.
Mr. Đinh Minh Tuấn, Director of Batdongsan.com.vn for the Southern region, believes that in a volatile market, projects nearing handover offer greater peace of mind due to actual progress and immediate profit potential. Buyers can directly verify the construction quality, rather than relying solely on simulated images or information from brokers.
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Original article source: CafeF
