Since 2012, the price of housing has increased by an average 5.5 percentage points. While it has been observed that behind this increase is, among other factors, increased price of cement and concrete, these actually contributed only 0.1 percentage points higher to the final price of housing.

A study by researchers from EGADE Business School and the Tecnológico de Monterrey Department of Civil Engineering concluded that the cost of cement affects on average 5.6% of the direct cost of construction and a maximum of 4.2% of the final average price of a home in Mexico. This means that if the price of cement went up 10%, the construction costs and the final price of a home would increase 0.56% and 0.4%, respectively.

According to the study, the impact of the price of cement varies by category of homes, ranging from 1.2% to 9.8%, with categories merged. However, it was concluded that from 2004 to today, cement and concrete have seen the lowest cumulative price inflation of all building materials, so the prices of these materials have not substantially affected the costs of residential construction. 

Machinery and equipment, labor costs, the costs of land, and other outside factors not related to construction, such as profit margins, paperwork, and financial costs, were identified as factors that greatly influenced the price of homes.

Other results showed that cement and concrete have made up 0.4 percentage points of the 3.5 percentage points of the annual average increase of the cost of home construction since the housing crisis began in 2012, according to estimates from a series of published prices.

Similarly, the study calculated the linear correlation in each state, ranking them from highest to lowest home prices over the last eight years and in sub-periods within this same measurement, and found that there is no significant link between them and consumables indicators, such as general construction costs or the costs of materials or machinery and rented equipment, or labor costs. 

These data indicate that the difference in the final price of homes by state in Mexico is more a result of particular aspects of each area, such as the microstructure and profit margins with developers and in the real-estate industry, the costs of land, and the protocols and other transactions required in each area. 

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The independent study, which analyzed data from 2004 to 2016, was carried out by Jorge A. Martínez-González, CFA, the director of the EGADE Business School, Monterrey campus Master in Finance, with help from Salvador García, the director of the Tecnológico de Monterrey Civil Engineering Department, and Miguel Davis, a full-time professor in the same department. The study was commissioned by the National Cement Chamber.

Since 2012, the price of housing has increased by an average 5.5 percentage points. While it has been observed that behind this increase is, among other factors, increased price of cement and concrete, these actually contributed only 0.1 percentage points higher to the final price of housing.

A study by researchers from EGADE Business School and the Tecnológico de Monterrey Department of Civil Engineering concluded that the cost of cement affects on average 5.6% of the direct cost of construction and a maximum of 4.2% of the final average price of a home in Mexico. This means that if the price of cement went up 10%, the construction costs and the final price of a home would increase 0.56% and 0.4%, respectively.

According to the study, the impact of the price of cement varies by category of homes, ranging from 1.2% to 9.8%, with categories merged. However, it was concluded that from 2004 to today, cement and concrete have seen the lowest cumulative price inflation of all building materials, so the prices of these materials have not substantially affected the costs of residential construction. 

Machinery and equipment, labor costs, the costs of land, and other outside factors not related to construction, such as profit margins, paperwork, and financial costs, were identified as factors that greatly influenced the price of homes.

Other results showed that cement and concrete have made up 0.4 percentage points of the 3.5 percentage points of the annual average increase of the cost of home construction since the housing crisis began in 2012, according to estimates from a series of published prices.

Similarly, the study calculated the linear correlation in each state, ranking them from highest to lowest home prices over the last eight years and in sub-periods within this same measurement, and found that there is no significant link between them and consumables indicators, such as general construction costs or the costs of materials or machinery and rented equipment, or labor costs. 

These data indicate that the difference in the final price of homes by state in Mexico is more a result of particular aspects of each area, such as the microstructure and profit margins with developers and in the real-estate industry, the costs of land, and the protocols and other transactions required in each area. 

_____________________

The independent study, which analyzed data from 2004 to 2016, was carried out by Jorge A. Martínez-González, CFA, the director of the EGADE Business School, Monterrey campus Master in Finance, with help from Salvador García, the director of the Tecnológico de Monterrey Civil Engineering Department, and Miguel Davis, a full-time professor in the same department. The study was commissioned by the National Cement Chamber.