The surge in CCI differentiates from the hike in RPPI


The hike in the Construction Cost Index (CCI) and the surge in the Residential Property Price Index (RPPI) had a near-similar annual course in September, October, November, and December 2021. The RPPI started to exceed the CCI as of January 2022.

The difference, which was small in January, has gradually increased.

But their direction was the same until May. The situation completely changed in May. The annual hike in the CCI declined from 106.6% in April to 105.7% in May. The annual surge in the RPPI rose from 127% to 145.5% in the same period. The difference between the CCI and the RPPI has increased that much for the first time ever.

The graph indicates the annual change rate. Two key drivers played a role in this. First, the hike in the CCI reflected late on the RPPI. Second, the hike in house demand continues to increase. The deterioration in the supply-demand balance has revealed such rates. The problem seems to be increasing. The deterioration in pricing behavior has brought us to this situation. Ignore the annual decline in the CCI in May. Costs increased in May. But the hike remained below the surge in May 2021. That’s why the annual rate decreased and the surge in the CCI continues. The re-acceleration of this surge is another factor creating pressure on the RPPI.

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