Construction costs in Qatar hit new heights

Doha has overtaken Dubai as the hottest construction hotspot in the region, according to a survey of regional costs published this week by MEED (Middle East Economic Digest).

The first ever survey of construction materials and labour prices across the Middle East has revealed that shortages in key resources, including cement, steel and aggregate, is driving up the cost of construction in most markets.

In Qatar, which experienced a 16 per cent boom in construction activity in 2004, prices have been rising across the board since December, with some costs climbing as much as 35 per cent. Prices elsewhere in the region also grew in the first half of the year, although less dramatically.

The survey was carried out for MEED by UK cost consultant Davis Langdon. Steven Coates, resident partner of Davis Langdon, said, “Doha is sitting on massive gas reserves, which have led to a sudden construction boom that is pushing up prices.”

The relative slowdown in cost hikes in Dubai, which saw the largest increases in 2004, is expected to be temporary. Contractors in the emirate are anticipating a renewed surge in price rises in the second half of the year.

Ayman Razek, general manager of MEED Projects, said, “The rapid growth in construction activity in places like Dubai and Doha has stretched the capacity of the local market.

“Until local supply catches up with demand contractors and developers will need to plan on the basis of rising costs.”

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