RRI.CO.ID, Jakarta - The price of cement, one of the main materials used in housing and property construction, has increased significantly over the past six months. This price spike has raised concerns about higher construction costs and delays in many projects.

For example, a widely used cement brand was previously sold at around IDR 57,000 per bag in February. As of July, the same product has reached around IDR 85,000 per bag.

Market observations show that cement prices currently vary between IDR 80,000 and IDR 85,000 per bag. This represents an increase of around 49% compared with the previous price level.

The sharpest increase was recorded from the fourth week of April, when cement prices reached around IDR 59,000 per bag. Prices then surpassed IDR 60,000 in June and jumped to around IDR 80,000 in July.

Other building materials in North Sumatra have also experienced price increases. Steel bars measuring 12 mm increased by around 5.6%, while 8 mm steel bars rose by approximately 21%, and wall paint prices increased between 13.5% and 29.6%.

The rise in cement, steel, and paint prices was mainly driven by higher production costs caused by geopolitical tensions and energy supply issues. Rising coal prices, which are a major cost driver of industrial production costs, have also contributed to higher prices for construction materials.

In contrast, brick prices have slightly declined due to oversupply. The price fell from around IDR 555 per piece to IDR 550 per piece, putting additional pressure on local brick producers who are already facing weaker demand.

The increase in building material prices has also affected property developers. Many developers are choosing to delay housing projects rather than build new homes at significantly elevated costs.

The situation may also affect government housing programs and reduce demand for construction workers. Delayed projects, rising budgets, and difficulties in completing developments could have broader implications for national economic growth.

The property and construction sectors are facing significant challenges due to rising costs and global uncertainty. The ongoing geopolitical turmoil has increased pressure on industries linked to construction, manufacturing, infrastructure, and real estate.

Writer: Gunawan Benjamin (Economist, Islamic University of North Sumatra)