The construction costs in Romania have risen to EUR 600 per square meter, VAT not included. This will squeeze the developers' hefty profit margins (estimated at 50%) and push up the prices, argues Cristian Erbasu, president of the Employers' Federation of Construction Companies (FPSC).

The construction materials prices have risen even by 100% in some cases over the past year.

The constructors are asking the Government to take measures to continue investment, Economica.net informed. It is not clear what FPSC suggested to the Government, as the construction sector already benefits from a preferential regime for labor taxation to address workforce scarcity.

"The costs of building apartments are rising and will continue to rise. I'll give you some benchmarks, so you can figure out where we're heading. In Romania, two or three years ago, the average cost was EUR 400-500 per sqm without VAT. Now we are at EUR 600 per sqm. In Poland, the cost exceeds EUR 1,000 per sqm, and in Belgium - EUR 2,000 per sqm built. Given that the price of the materials is about the same, the labor force also tends to converge, let's say it is not five, six times lower, it is half the labor cost in western Europe, you realize that the costs are going in that direction," said FPSC's president Erbasu.

andrei@romania-insider.com

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