The price index of building costs for newly constructed homes was 5.1 percent higher in the fourth quarter of 2001 than in the same period twelve months previously. This increase is smaller than that in the third quarter, when costs rose by 7.3 percent.
The changes in the third and fourth quarters of 2001 on twelve months previously indicate a change in the trend of building costs of new dwellings. In the second quarter of 2001 there was an increase of 9.8 percent compared with the second quarter in 2000.
Price index of building costs of new dwellings (1995=100)
In spite of the fact that the increase in building costs slowed down in the third and fourth quarters, the average increase of the price index in the year 2001 was still higher than in 2000.
In 2001 the average increase was 7.4 percent, while in 2000 building costs rose by 5.3 percent. The larger increase in 2001 was mainly caused by the strong increase in building costs in the first half of the year. It should be mentioned that the increase in building prices was partly caused by the increase in the rate of VAT introduced on 1 January 2001, from 17.5 to 19 percent.