Construction industry headed for 'serious trouble' - architect

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Brasil Últimas Notícias,Brasil Manchetes

Inflation is “hitting every project that’s out there.”

The construction industry is in for “serious trouble”, an architect has predicted.

“A typical apartment that would sell for €411,000 would have a site value of about €46,000 and a margin of 13% - which is about the same again,” he said. “When costs increase by 5%, your site value or your margin falls by about 22%, so it has a huge effect on the bottom line.“If you’re sitting down and your sales price hasn’t changed, your site value has dropped by almost €45,000 to about €4,000.”

“Inflation and price are like two tongs of a pincer and when… the tide of inflation starts rising and the price starts flattening or going down, you’re in serious trouble,” Mr Reynolds said.

 

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The dogs in the street could have told the government this. But they insisted on lock downs and borrowing money and splurging it into the economy. The chickens are going to roosting for a long time

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Brasil Últimas Notícias, Brasil Manchetes