Construction costs across the UAE, which have remained stable over the past 12 months, are unlikely to experience any major increase in the near future under the current low oil price environment.
Although the cost of steel bar, used in reinforced concrete, has dropped by 14 per cent over the year as a result of weakening demand in China, this was offset by a steady growth in prices for locally-sourced materials.
Aggregate and sand prices increased by 3.5 per cent, for instance, glass by 2.5 per cent, concrete blocks by 1.5 per cent and tiles and cement prices were 1 per cent higher.
Moreover, despite recent government statistics in Abu Dhabi reporting a 16.5 per cent year-on-year spike in labour costs, Terry Bain, a director of Colliers’ cost and project management division, said that wage inflation had made “no great significance in the overall value” of construction costs.
Colliers said that so far this year, the local construction market has “not yet reached a level of activity to put an upwards pressure on construction companies to increase margins”.
“The market in the UAE is maturing quite well,” said Mr Bain. “We’ve got a lot of residential, schools, health facilities all coming through. You still have destination projects like Bluewaters island and the theme parks coming online. This has given a lot of comfort [to contractors]. We’re still seeing overseas investment coming in and it’s generating a very stable effect.
Donal O’Leary, director of commercial services at the project management consultancy Faithful + Gould, said that wages have risen, particularly for certain skilled trades such as blocklayers thanks to the volume of new projects in Dubai requiring their skills.
However, he argued that the UAE was a tale of two markets.
“If you look at Abu Dhabi, it hasn’t had any major contract awards in the past year, so it’s competitive in terms of tender prices. With the infrastructure that is still needed, the market in Abu Dhabi will increase, it’s just a case of releasing some of the funding streams.”
The stability of both materials and labour costs is in stark contrast to industry forecasts made two years ago, when an inflation spike was expected as a result of intra-regional competition for resources from Qatar and Saudi Arabia.
In 2013, EC Harris predicted that Qatar faced construction cost inflation of 18 per cent a year from 2016-19 as its Fifa World Cup-related construction programme peaked.
But the lower oil price has led to delays and some project cancellations, taking some of the heat out of the market.
“The oil price is starting to bite now, and there’s things that aren’t happening,” said Mr O’Leary.
Mr Bain said that he did not believe the oil price has affected the UAE market yet, but could do so if it continues to remain low for the next 12 months. He said construction labour migrates quite freely between GCC countries, and if Saudi Arabia’s government slows its proposed investment programme “you could end up with an oversupply of talent”.
Mr O’Leary said there are “a couple of large schemes in the pipeline that may come to the market in Abu Dhabi over the next quarter, which will help the market”, with one of these likely to be a major retail project. He expects retail projects to remain buoyant, and for Dubai’s construction sector to continue to be driven by Expo-related work.
“The redevelopment of Al Maktoum International Airport will gather pace and there’s a large amount of projects in the hospitality sector.”
mfahy@thenational.ae
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Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
TO A LAND UNKNOWN
Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
Rating: 4.5/5
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
MEFCC information
Tickets range from Dh110 for an advance single-day pass to Dh300 for a weekend pass at the door. VIP tickets have sold out. Visit www.mefcc.com to purchase tickets in advance.
LA LIGA FIXTURES
Saturday (All UAE kick-off times)
Valencia v Atletico Madrid (midnight)
Mallorca v Alaves (4pm)
Barcelona v Getafe (7pm)
Villarreal v Levante (9.30pm)
Sunday
Granada v Real Volladolid (midnight)
Sevilla v Espanyol (3pm)
Leganes v Real Betis (5pm)
Eibar v Real Sociedad (7pm)
Athletic Bilbao v Osasuna (9.30pm)
Monday
Real Madrid v Celta Vigo (midnight)
The specs: 2018 BMW X2 and X3
Price, as tested: Dh255,150 (X2); Dh383,250 (X3)
Engine: 2.0-litre turbocharged inline four-cylinder (X2); 3.0-litre twin-turbo inline six-cylinder (X3)
Power 192hp @ 5,000rpm (X2); 355hp @ 5,500rpm (X3)
Torque: 280Nm @ 1,350rpm (X2); 500Nm @ 1,520rpm (X3)
Transmission: Seven-speed automatic (X2); Eight-speed automatic (X3)
Fuel consumption, combined: 5.7L / 100km (X2); 8.3L / 100km (X3)
UAE currency: the story behind the money in your pockets
The biog
Favourite hobby: I love to sing but I don’t get to sing as much nowadays sadly.
Favourite book: Anything by Sidney Sheldon.
Favourite movie: The Exorcist 2. It is a big thing in our family to sit around together and watch horror movies, I love watching them.
Favourite holiday destination: The favourite place I have been to is Florence, it is a beautiful city. My dream though has always been to visit Cyprus, I really want to go there.
TUESDAY'S ORDER OF PLAY
Centre Court
Starting at 2pm:
Malin Cilic (CRO) v Benoit Paire (FRA) [8]
Not before 4pm:
Dan Evans (GBR) v Fabio Fogini (ITA) [4]
Not before 7pm:
Pablo Carreno Busta (SPA) v Stefanos Tsitsipas (GRE) [2]
Roberto Bautista Agut (SPA) [5] v Jan-Lennard Struff (GER)
Court One
Starting at 2pm
Prajnesh Gunneswaran (IND) v Dennis Novak (AUT)
Joao Sousa (POR) v Filip Krajinovic (SRB)
Not before 5pm:
Rajeev Ram (USA) and Joe Salisbury (GBR) [1] v Marin Cilic v Novak Djokovic (SRB)
Nikoloz Basilashvili v Ricardas Berankis (LTU)
Copa del Rey final
Sevilla v Barcelona, Saturday, 11.30pm (UAE), match on Bein Sports
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
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The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
Aston martin DBX specs
Engine: 4.0-litre twin-turbo V8
Transmission: nine-speed automatic
Power: 542bhp
Torque: 700Nm
Top speed: 291kph
Price: Dh848,000
On sale: Q2, 2020
