RESIDENTIAL CONSTRUCTION OVERVIEW

This appendix outlines the general stages and requirements involved in residential construction projects, which may also be used for reference in commercial projects where applicable.

1. PRE-CONSTRUCTION PHASE

Expectations:

• Meetings with professionals (architect, contractor, engineers)

• Site inspections and feasibility assessment

• Budgeting and scheduling

Requirements:

• Certified copy of land title and tax declaration

• Lot plan and topographic survey

• Architectural, structural, and MEPF (Mechanical, Electrical, Plumbing, Fire Protection) plans

• Building Permit and related government clearances

• Signed construction contract and agreed payment terms

• Downpayment to authorize mobilization

2. CONSTRUCTION PHASE

Expectations:

• Excavation, foundation laying, structural framing

• Roofing, walling, finishing, electrical and plumbing installation

• Regular project updates and milestone inspections

Requirements:

• Approved permits posted onsite

• Safety compliance for workers and site visitors

• Progressive billing and payments based on accomplishments

• Owner coordination for materials (if any are owner-supplied)

• Documentation of changes through formal Change Orders

3. POST-CONSTRUCTION PHASE

Expectations:

• Site cleanup and waste disposal

• Final walkthrough (Punch-list) to check minor defects

• Turnover of keys, manuals, warranties, and as-built plans

Requirements:

• Occupancy Permit application and inspection

• Final payment and release of retention (as applicable)

• A signed Certificate of Acceptance by the Owner

4. WARRANTY PHASE

Expectations:

• Contractor's responsibility for repairs due to construction defects within the warranty period

• Typical coverage:

  • Structural Works – 1 year

  • Fixtures/Accessories – 3 months

Requirements:

• Written report of any defects submitted within the warranty period

• Coordination for scheduling of repair works

• Post-warranty issues may require a separate service agreement

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  RESIDENTIAL CONSTRUCTION OVERVIEW

  
  

Material Cost Forecast

Here’s an updated material cost forecast for 2025, focusing on the primary construction materials commonly used in the Philippines, with projections based on current market trends, inflation, supply chain dynamics, and anticipated demand in the coming year.

2025 Material Cost Forecast:

Material	2024 Price (Current)	2025 Forecasted Price	% Increase	Key Drivers of Price Change
Cement (per bag)	₱220 – ₱250	₱250 – ₱275	5% – 10%	Rising energy costs (fuel and electricity), ongoing supply chain issues, and increased demand from infrastructure projects under "Build, Build, Build".
Steel (per ton)	₱75,000 – ₱80,000	₱80,000 – ₱88,000	7% – 10%	Global steel shortages due to geopolitical tensions, higher fuel costs, and increasing demand for infrastructure and housing projects.
Rebar (per ton)	₱65,000 – ₱70,000	₱70,000 – ₱75,000	7% – 8%	Increased demand for housing, roads, and commercial developments, paired with import difficulties and rising fuel costs.
Concrete (per cubic meter)	₱7,500 – ₱8,000	₱8,000 – ₱8,800	5% – 10%	Fuel price hikes affecting transportation and production costs, along with rising demand from the housing and commercial sectors.
Timber/Wood (per cubic meter)	₱35,000 – ₱45,000	₱38,000 – ₱50,000	5% – 10%	Increased cost of imported wood due to weaker peso and logistics bottlenecks, plus growing demand for locally sourced timber due to sustainability trends.
Tiles (per sqm)	₱800 – ₱1,500	₱850 – ₱1,650	5% – 8%	Rising import costs, especially for higher-end imported tiles, and demand from mid- and high-end residential developments.
Glass (per sqm)	₱1,500 – ₱2,200	₱1,600 – ₱2,400	5% – 9%	Global glass shortages, rising production costs, and demand from both the residential and commercial sectors for large glass windows and facades.
Electrical Supplies	₱15,000 – ₱20,000 (per project)	₱16,000 – ₱22,000	5% – 10%	Rising prices for copper (a key component in wiring), as well as increases in other imported materials for electrical fixtures and systems.
Plumbing Supplies	₱10,000 – ₱15,000 (per project)	₱10,500 – ₱16,500	5% – 8%	Increased costs of PVC pipes and fittings, driven by petroleum prices (PVC is derived from petroleum) and importation challenges.
Paint (per liter)	₱180 – ₱220	₱190 – ₱240	5% – 10%	Increased raw material costs and higher transportation costs, especially for higher-quality or imported paints.
Roofing Materials (per sqm)	₱450 – ₱650	₱480 – ₱700	5% – 8%	Rising prices for metal sheets and insulation materials, driven by the global steel market and higher energy costs for production.

Key Drivers Behind the Price Forecast:

1. Global Supply Chain Issues:

   • Steel and cement shortages are expected to persist due to global shipping bottlenecks, geopolitical tensions, and labor disruptions. This will drive material prices up, especially for imported products.

   • Local production is also affected by fuel costs, transportation bottlenecks, and high energy prices, making even domestically sourced materials more expensive.

2. Fuel and Energy Price Increases:

   • Fuel costs are a significant factor in the rising prices of construction materials, especially for heavy materials like cement, steel, and concrete, which require substantial energy for production and transportation.

   • Electricity price hikes are expected to increase the cost of materials that require energy-intensive manufacturing processes, such as tiles, glass, and roofing materials.

3. Inflation and Peso Depreciation:

   • Inflationary pressures in the Philippines, driven by rising fuel prices, higher food costs, and a weaker peso, are expected to contribute to higher material prices—especially for imported materials like steel, tiles, and electrical supplies.

   • The weak peso makes imported goods more expensive, which directly impacts the price of construction materials.

4. Infrastructure and Housing Demand:

   • The government’s continued focus on large-scale infrastructure projects (especially under the "Build, Build, Build" program) and rising demand for housing in urban areas are driving up the cost of construction materials, as more projects compete for limited resources.

Impact on House Construction Costs in 2025

Given the projected increase in material and labor costs, total construction expenses for a typical residential home are expected to rise by 5% to 10% in 2025. Here’s a forecast for a 100 sqm house:

Type of House	2024 Estimated Cost (100 sqm)	2025 Projected Cost	% Increase
Low-Cost Housing	₱2.5M – ₱3.5M	₱2.75M – ₱3.85M	5% – 10%
Standard Mid-Range Home	₱3.5M – ₱5M	₱3.75M – ₱5.5M	5% – 10%
High-End Home	₱5M – ₱6M	₱5.25M – ₱6.6M	5% – 10%

Strategic Considerations for Builders:

1. Buy Materials Now:

   • If possible, purchase materials now or lock in prices with suppliers before the projected price increases. Bulk purchasing or long-term contracts could help mitigate the impact of rising costs next year.

2. Focus on Local Materials:

   • Given the expected rise in import costs, shifting to locally sourced materials (e.g., locally produced cement, wood, and roofing materials) could help manage costs better, as imported goods are expected to see larger price hikes due to the weak peso and shipping delays.

3. Leverage New Building Technologies:

   • Explore alternative building materials or techniques such as prefabricated materials or modular construction. These technologies can potentially reduce the overall construction time and labor costs, helping offset rising material costs.

4. Monitor Government Initiatives:

   • Keep an eye on government policies related to construction and real estate. Potential subsidies or tax incentives for green building materials or sustainable construction methods could help offset some of the costs, especially if you're working on large-scale projects or commercial developments.

Conclusion: Build Now or Wait?

1. Build Now:

   • Locking in 2024 material and labor costs will likely result in lower overall construction expenses. If you’re financing the project, locking in current interest rates (6%-8%) will also help you avoid future rate hikes that could increase financing costs.

   • Given the projected 5%-10% rise in material costs and similar increases in labor rates, building now is recommended for those looking to minimize overall costs.

2. Wait Until 2025:

   • If you’re considering waiting, be prepared to pay higher material and labor costs. However, new technologies and potential government incentives could slightly offset the rising costs.

   • If you expect significant improvements in building technology or government-backed housing programs, waiting might provide long-term benefits, but the cost risk is higher in the short term.

     
     

     

     Material Cost Forecast

     
     

Essential Criteria for Hiring the Right Builder in Cagayan de Oro

Choosing the right builder for your construction project is a critical decision that can make or break your dream home or commercial establishment. Whether you’re planning to build a house, renovate a space, or start a commercial project, hiring a reliable and skilled contractor in Cagayan de Oro (CDO) ensures the successful completion of your vision. This guide outlines the key factors to consider when selecting a builder in CDO.

1. Experience and Track Record

Experience is paramount when it comes to construction. A builder with a proven track record in the type of project you are embarking on ensures that they have the knowledge and expertise to deliver quality work. In Cagayan de Oro, builders who have successfully completed residential and commercial projects over several years have better industry connections, which can also help in securing permits and quality materials.

Tip: Ask for portfolios, references, and even visit their previous projects if possible. Look into projects that match the scope of your construction—whether it’s residential, commercial, or industrial.

2. Licenses and Certifications

In the Philippines, it is mandatory for builders to hold the proper licenses to operate legally. This ensures that they adhere to local building codes and safety standards. Hiring a licensed builder in CDO not only guarantees compliance with local regulations but also minimizes risks of project delays or penalties due to legal complications.

Check for:

• PCAB License (Philippine Contractors Accreditation Board)

• Local business permits specific to CDO.

  
  

Tip: Verify their licenses by asking for documentation or checking online databases that list licensed builders.

3. Strong Reputation and Client Reviews

In the digital age, it is easier to research a builder’s reputation. Look for online reviews, social media feedback, and testimonials from previous clients. Builders with strong, positive reviews typically provide good communication, transparency, and quality work.

Additionally, check if they are active in the Cagayan de Oro Builders Association or any other local industry groups. Builders with a good standing in the community are less likely to leave projects unfinished or deliver subpar results.

4. Financial Stability

A builder's financial health can have a direct impact on the project’s timeline and completion. A financially stable builder is more likely to complete your project on time and within budget because they won’t be struggling with financial setbacks or supply shortages.

To assess this:

• Request proof of insurance to ensure coverage for property damage or accidents.

• Ask for their payment terms and milestones in the contract.

• Ensure that their pricing is transparent to avoid hidden costs.

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5. Transparent and Detailed Contracts

A well-structured contract is a safeguard for both you and the builder. It should outline every aspect of the project, from the scope of work, timeline, and materials to payment terms and warranties. Avoid builders in CDO who are hesitant to provide a formal contract, as this can lead to potential legal disputes or unfulfilled promises.

Tip: Look for builders who offer a warranty on their work. This shows confidence in their craftsmanship and can provide you with peace of mind.

6. Access to Quality Materials and Subcontractors

In CDO, having access to high-quality materials is essential to ensure the longevity and durability of your construction. Ask your builder where they source their materials and whether they have strong relationships with reputable suppliers in the area. Additionally, ensure that the subcontractors they work with (electricians, plumbers, etc.) are qualified and experienced.

Tip: If sustainability is important to you, ask if they have experience with eco-friendly construction techniques and materials, such as energy-efficient designs or green building certifications.

7. Good Communication Skills

A builder who communicates clearly and frequently is essential for the smooth progress of your project. They should be able to update you on the project’s status, inform you of any changes, and be available to answer questions or address concerns.

In Cagayan de Oro, where weather conditions or local logistics can affect project timelines, having a builder who is proactive about communication will save you time and stress.

Tip: During initial consultations, gauge their communication style and willingness to explain technical details.

8. Competitive but Fair Pricing

While pricing is an important factor, the cheapest option may not always be the best. Builders who offer significantly lower prices may cut corners, use substandard materials, or delay the project due to financial constraints.

In Cagayan de Oro, compare quotes from multiple builders, ensuring that you understand what is included in the pricing. Opt for builders who provide a detailed breakdown of costs so you can see exactly where your money is going.

Tip: Be wary of quotes that are too good to be true. Always consider the builder’s experience, reputation, and the quality of their past work when evaluating costs.

9. Project Timeline and Availability

One of the most important factors in hiring the right builder is ensuring they can commit to your project within your desired timeframe. Busy contractors may have multiple ongoing projects, which can lead to delays. Always discuss timelines upfront and ask about their current workload.

Tip: Make sure that the builder includes a realistic completion date in the contract, along with penalties for missing deadlines without valid reasons.

10. Problem-Solving and Flexibility

Construction projects often encounter unforeseen challenges, such as weather delays or supply shortages. A good builder is one who can think on their feet and find quick, effective solutions without compromising quality.

In Cagayan de Oro, where the weather can be unpredictable, particularly during typhoon season, a builder with good problem-solving skills and flexibility is essential to keep your project on track.

Hiring the right builder in Cagayan de Oro involves careful research and consideration of several critical factors, including experience, reputation, legal standing, and communication skills. By thoroughly vetting potential builders, you can ensure that your project will be completed successfully, within budget, and on time.

Essential Criteria for Hiring the Right Builder in Cagayan de Oro