Lets talk about cost of construction. Anyone here a Quantity Surveyor? Or Project Manager?
I just need to hear their views about whats goin on with contractors in this market.
Alot of contractors are very worried, I was just talking to a client of mine and also a bank manager about how there is an element of fear.
When a contractor agrees with a developer a price per square foot, now what they do, is they always put a clause in the contract to say that if the prices rise above 25% (example) they will share this loss with the developer.
The contractor cannot pay the rise in construction prices off his pockets alone during the term of construction.
Developers like Damac are facing a huge problem with this issue. They are not making much profit, cos the cost keep getting closer to the selling price, especially when they promised to provide such flashin futuristic towers. Its gona cost them alot, and I am not sure if they can deliver what they promised they will deliver.
If they cant, then they will delay it until they can afford it or get finance help from the banks.
Just wanted to share this concern in the market right now.
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