The technical director for Hyder Consulting Middle East, Andy Davids, made a recent statement saying that the cost of construction materials in the Gulf region were actually considerably and substantially lower than in other countries such as those in North America, Europe, and some portions of Asia.
This news comes as a surprise to many who have recently assumed that the rising cost of construction in the region was largely due to the cost of materials. However, according to Mr Davids, apparently that is not the case here.
Mr Davids further added that the low construction costs were the result of a relatively inexpensive supply chain that provides low costs building materials and labour. Davids, who has done work on some of the tallest buildings in the world, including the Burj Dubai and the Emirates Towers, was quick to state that Gulf contractors are efficient and their workmanship quality is equally as good as those that can be found anywhere else on the planet. Davids made these comments while speaking at the appropriately named Council on Tall Buildings and Urban Habitat 8th World Congress which began in Dubai this week.
This is good news for real estate and property investors who have only been watching other market indicators for the Gulf region such as the lowering US dollar value and the rising rate of inflation. While there has been substantial coverage over the interest rates and high inflation for the region, little has been given to the construction sector. Property investors may need to reconsider the factor of lower construction costs when conducting due diligence on the viability of any projects.
The relatively few reports which do mention construction costs for the region have confirmed that the price of materials has remained relatively flat however it is the cost of labour which is inching higher on a monthly basis.
