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Construction cost remains stable in Dubai and Abu Dhabi

Price of construction materials have remained stable over the last year, according to Colliers International’s report released this week. The Q3 2015 Construction Cost Benchmarking for Dubai and Abu Dhabi provides a consolidated construction cost image of a proposed development type based on the historic movement of global construction commodity trends, movement in construction materials, shifts in manpower and construction workload & competitiveness, recorded a variance of just -0.5% to + 1%, in the price of main construction materials.

Bob Flanagan, director and head of project management and cost consultancy for Colliers International in the MENA region said: “Whilst the drop in oil prices has directly affected the cost of some materials, such as steel rebar, rising costs in other locally manufactured and imported materials, have balanced this out.”

According to the report the largest material shift recorded over Q2 2014- Q2 2015 was steel bar which witnessed a 14% drop. Marginal increases were recorded in the price of aggregate & sand (+3.5%), blockwork (+1.5%), tiles & marble (+2.1%), glass (+2.5%)  and cement (+1%).

The report points to the fact that construction labour, which includes skilled & unskilled site operatives, supervisors and management staff, represents just under 30% of overall construction costs. Therefore, going forward a 10% increase or decrease in labour will swing building costs by circa 3%.

Despite stability witnessed over the last year, a potential spike in construction prices are not to be discounted. The two factors that will determine a short term increase in construction prices are labour costs which may be influenced by rising inflation, and also competition over resources available to deliver projects.




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