Why renovation costs have soared in Singapore

Homeowners in Singapore doing another renovation after a gap of a few years may be surprised to find that renovation costs have spiked considerably since their last renovation. While this article confirms that more HDB flat owners (are) spending lavishly to create dream home (click to read!), I am guessing that $100K renovations have become more common due to ever rising inflation and renovation costs.

There are not many news/articles I can find on this topic. One was way back from 2008

Home makeovers hard hit by price hikes – 21 March 2008

Construction costs – for both big projects and home renovations – have risen due to a rise in raw material prices and labour costs. And they are expected to increase even more this year.

Industry experts say overall construction costs are expected to rise by another 15 to 20 per cent this year – following a 40 per cent spike in the last two years.

A global spike in raw material prices, and a construction resources and manpower crunch here, are to blame for the relentless rise, say market players.

In particular, prices of reinforcing steel bars – used extensively in construction – have soared 64 per cent from $753 per tonne in January last year to $1,235 this January, according to data from the Building and Construction Authority (BCA).

Rising global demand for steel, fuelled by a building boom in developing countries such as China, India and Vietnam, is pushing prices up sharply.

The price of cement rose 30 per cent to $117 per tonne in the same period.

Consumers’ pockets are hard hit by the price hikes. Contractors say home owners now have to fork out up to 20 per cent more for renovation works.

Renovating a 110 sq m five-room HDB flat, for example – which would have cost $80,000 at most at the start of last year – would now mean forking out $100,000, said contractor Steven Koh, 51, of Colorado Design.

Considering that was almost 4 years ago, I guess renovation costs would have gone up even more than what was mentioned in the article since Singapore experienced fairly significant inflation the last few years.

Another more recent news (16 June 2012) reports that there is a “surge in construction projects around the island“… if the supply-demand theory holds true, then I guess that means rising prices again.