Since steel accounts for 15-20 percent of construction costs, a 50 percent surge has forced most developers to increase prices, Ngo Quang Phuc, CEO of housing company Phu Dong Group said at an online forum Friday.

Before declining in the last few weeks, steel prices had seen a sudden surge in the beginning of this year. The prices had nearly doubled this year to VND25-26 million ($1,085-1,129) per ton.

Tran Khanh Quang, CEO of another housing firm, Viet An Hoa, said the cost of houses has risen by 5-15 percent.

But for apartments, most developers now have a profit margin of 40-50 percent, or even 200-300 percent, and therefore the rising steel prices do not necessarily affect the unit price, he said.

Industry insiders also said that the price hikes increase the burden on people seeking to own affordable houses in major cities.

Phuc said it is no longer possible for developers to offer an apartment at VND2 billion ($88,000) or less in HCMC.

Other costs have also increased, he said, citing the example of a fire protection system for apartment buildings with 400 units, whose cost has increased by 66 percent to VND25 billion.

"The only way to lower apartment prices is to reduce the size of units."