Rising costs hit UAE property developers
Property developers and building contractors in the UAE have been hard hit by rising costs of building materials in recent months while construction continues at an unprecedented pace amidst the nation’s booming real estate industry.
A recent study by Dubai’s Danube Building Materials FZCO, maintained that in recent months, the prices of core building materials had surged by as much as 20-30 percent for red meranti, MDF whitewood and plywood, according to Khaleej Times. The company claimed that costs could rise further by as much as 20 per cent over the next two or three months.
The rise in the price increases of construction materials coupled with rising labor costs have driven up the cost of projects worth more than Dh825 billion under way in the UAE by as much as 30 to 35 per cent in three years, stated construction industry sources.
"These increase in materials' prices, coupled with other cost escalations including accommodation, labor and fuel prices, have resulted in an average 30 to 40 percent surge in construction costs,” sources said.
"Dubai is affected by the situation in the Middle East and the world. Due to the high consumption in the local market, steel prices had increased even sharper. Hot-rolled plates prices increased by 45.2 per cent in August 2006. We notice that Dubai has recorded the highest increase in the prices of hot rolled plates during the period," they added.