According to the Q2/2026 Market Price Report by the Ministry of Finance, in the first 6 months of 2026, the housing and construction materials group increased by 6.72% compared to the same period last year. In Q2 alone, the price index for housing, electricity, water, fuel, and construction materials rose by 7.77%, indicating that input costs for construction activities remain under pressure as demand for execution and public investment disbursement grows.

Pressure from heavily fluctuating construction material costs is directly impacting the progress of many real estate projects. Photo: VA

Pressure from Supply

Construction steel prices recovered strongly thanks to construction demand from civil works and infrastructure. On average in Q2, steel prices reached about 16,575 VND/kg, up 5.55% compared to Q1 and 9.42% higher than the same period in 2025. Along with steel, prices of construction sand and stone also rose in many localities due to limited supply, while fuel, transportation, and extraction costs remained high.

This pressure is forecasted to persist as public investment enters its peak disbursement phase. According to the Ministry of Finance, as of July 23, 2026, the country disbursed about 390,947 billion VND, equivalent to 38.5% of the annual plan. The remaining capital will continue to focus on transport infrastructure projects, industrial zones, and key works, thereby maintaining high demand for steel, cement, sand, stone, and leveling soil in the final months of the year.

Faced with market developments, the Ministry of Construction has finalized new regulations on construction investment cost management, methods for determining norms and economic-technical indicators, creating a basis for localities to update and publish prices of materials and construction price indices closer to reality, contributing to improving cost management efficiency.

Assessing market developments, Dr. Thai Duy Sam – Vice President and Secretary-General of the Vietnam Association of Building Materials (VABM) – stated that since the beginning of Q2, prices of many construction materials have continued to rise due to the simultaneous impact of supply-demand dynamics, input material costs, exchange rates, logistics, and global energy market fluctuations.

According to him, in Vietnam, the group with the steepest increases remains leveling soil, stone, and sand serving infrastructure and real estate projects. Particularly in the Southern region and the Mekong Delta, supply has failed to meet demand, driving material prices higher.

In addition, tightened resource management has also affected supply. Increased control over illegal sand mining, stricter licensing of new mines, and enhanced management of extraction activities help protect resources, but simultaneously reduce supply in certain localities in the short term. Combined with rising transportation costs, material prices delivered to site locations continue to be pushed up.

Rising material prices force many contractors to review estimates, adjust construction plans, or accept reduced profit margins to ensure progress. For real estate developers, increased input costs raise the total investment, while the room to adjust selling prices is no longer as flexible as in previous periods. This is also one of the factors further narrowing the margin for short-term housing price reductions.

Improving the Mechanism

Dr. Thai Duy Sam believes that to alleviate pressure on the market, regulatory authorities need to continue strictly monitoring material price movements while resolving procedural bottlenecks to boost the supply of materials currently in deficit.

He proposed creating favorable conditions for businesses to complete procedures for expanding the capacity of operating mines or considering opening new extraction points once planning and environmental requirements are met. Along with this, localities need to update and publish material prices closely following market trends so project owners and contractors have a basis to adjust costs, limiting complications during project implementation.

From a business perspective, Mr. Nguyen Quoc Hiep – Chairman of the Vietnam Association of Construction Contractors (VACC) – noted that a major current challenge is that material prices fluctuate rapidly while the system of norms, unit costs, and payment mechanisms has not been updated accordingly.

According to him, amidst the ongoing implementation of key strategic infrastructure projects, early adjustments to construction norms and unit prices, timely publication of material prices, and mechanisms to handle major input cost fluctuations will help ensure investment efficiency, reduce contractor risk, and maintain the progress of key projects.

Experts note that as construction demand continues to grow, the issue lies not only in price control but also in ensuring a stable supply and updating cost management mechanisms in a timely manner. This is considered a critical condition for enterprises to proactively plan investments while guaranteeing the progress of infrastructure and real estate projects.