RISING raw material prices have raised the construction cost of a 100 square-metre new home by around €14,000 according to Murcia’s Federation of Construction Employers(Frecom).

Frecom president, Jose Hernandez, said that constructors are postponing new projects because they don’t know what kind of sale prices to offer in the current climate.

The current situation has prevented builders from recovering business they lost during the Covid-19 pandemic with the sector suffering a 3% fall in GDP last year.

“We have not recovered pre-Covid 19 levels and we have not just taken off,” says Hernandez.

Jose Hernandez

He estimates the cost of building a house has increased by around €140 per square metre.

Hernandez added that constructors are losing out because they cannot pass on the extra costs to purchasers who had signed contracts on a previously-agreed price.

Public works projects are also being delayed due to the reluctance of administrations to increase budgets.

Nevertheless home property purchases are going up with the focus very much on the second-hand market.

“House sales rose by 30% in the Murcia region last year and this year show increases of 32% as buyers see it is a good time to buy a house,” said Jose Hernandez.

He took the view rises in mortgage interest rates and a possible shortage of housing supply have contributed to the current housing boom.



  1. That’s interesting Alex. Thanks for the indicated increase amount (E140) that prices per sqm have risen. But from what base? What is the current price per sqm including the increase? Thanks

    Location : Marbella

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