In Ho Chi Minh City, soaring material costs stall homebuilding dreams

Cement prices rose three times in March alone, increasing by more than VND100,000 (US$3.8) per tonne, while sand, stone, bricks, and steel have also climbed sharply, in some cases by 25–30 percent compared with late last year, according to market participants.

At a residential construction site in Tan Binh Ward in late March, contractor Van Hung, 59, said volatile prices have made planning nearly impossible.

“Prices change every day, and if you don’t calculate carefully, you take a loss,” he said.

Material suppliers said price swings now occur weekly or even daily, prompting them to abandon fixed-price commitments and quote based on current market rates.

“Prices fluctuate constantly, so we can only quote at the time of sale,” said Canh Toi, a supplier delivering materials to the site.

“If customers don’t accept, projects may have to stop.”

Sand prices have risen from about VND450,000 ($17) to VND560,000 ($21.3) per cubic meter, while construction stone has jumped from more than VND500,000 ($19) to as much as VND780,000 ($29) per cubic meter and is in short supply.

Brick prices have also increased depending on type, with some nearing VND2,000 ($0.08) per unit, and steel has seen multiple price hikes of about VND600 ($0.023) per kilogram.

Contractors say the increases have left them caught between rising costs and fixed-price contracts signed before the holiday, with some projects temporarily suspended as firms seek to renegotiate terms.

Hoang Van Hai, a contractor managing several projects, said three out of five sites under his supervision had been halted for weeks as his company negotiates with investors after costs rose by around 30 percent.

“Many contracts were fixed before Tet, so if we continue, we will take heavy losses,” he said.

Others press on despite shrinking margins to meet deadlines and maintain credibility, even as profits are eroded.

Homeowners are also feeling the strain, with some projects exceeding initial budgets by hundreds of millions of dong, forcing families to scale back designs or reuse materials.

Nguyen Cong May, 31, said the cost of building his family home had risen from an estimated VND400 million ($15,190) to about VND500 million ($18.987) within a short time.

“We expected prices to climb, but not this fast after Tet,” he said, adding that his family is revising plans to keep costs manageable.

Drivers of the surge

Industry groups have attributed the surge to supply shortages and rising input costs. 

The Ho Chi Minh City Mining Industry Association said in a report cited by Thanh Nien (Young People) newspaper in January that demand for construction stone in 2026 could exceed 35 million cubic meters, compared with supply capacity of about 17.9 million cubic meters from licensed mines.

Separately, the Vietnam Association of Road System Investors (VARSI) said in a report cited by the Voice of Vietnam in March that diesel prices rose about 72 percent in late February amid tensions in the Middle East, driving up transport and production costs across materials including sand, steel, and cement.

Due to an escalating conflict involving Iran, the United States, and Israel in the Middle East since late February, the Strait of Hormuz, which normally carries about 20 percent of global oil supplies, has been effectively shut or severely disrupted.

VARSI also said, citing feedback from businesses, that some suppliers were distributing materials through intermediaries instead of selling directly to contractors, pushing prices to 1.3-1.5 times listed levels and distorting the market.

For solutions, industry representatives have called for faster licensing of material sources, more frequent price updates, and wider use of recycled materials and manufactured sand to ease supply constraints.