UAE construction costs to soar

[DAYFox]

Originally Posted by DoBuy

I appreciate there are still launches going for 750 thats what I said earlier.What I was asking is when will increased construction charges start showing in launches and will this increase the value of completed properties?

I am not aware of projects launched in BusinessBay for 750AED. Do you have any examples?

As far as I know increased construction cost have already responed in higher launch prices... But higher launch prices are also linked to a general advanced progress in BB area of course.

[DoBuy]

Originally Posted by DAYFox

I am not aware of projects launched in BusinessBay for 750AED. Do you have any examples?

As far as I know increased construction cost have already responed in higher launch prices... But higher launch prices are also linked to a general advanced progress in BB area of course.

I was talking about 750 for res properties in general and not BB

[wesrae]

DoBuy

Contractor's are very devious and sometimes clever creatures! If not clever then usually aggressive and manipulative!

If the Contractor cannot absorb costs there are 101 scenerios for resolution. At the end of the day the Developer wants to make his margin, maintain his reputation to ensure repeat business. It is in everyones best interest to finish as quickly as possible with the required quality.

It all comes down to negotiation, commom sense and good business skills. If a Contractor can't absorb costs the Client has to make decisions. Firstly he or his PM Company should spot this prior to works ceasing or even slowing. The scale of the costs will need to be assessed and ultimately once the Devloper has had a chance to weigh up all his options, it might simply be the cheapest and quickest solution to financially assist the Contractor.

If the Contractor folds or is removed from the project, for sure it will cost the Developer more money to reemploy at revised rates. Also time will be lost during re-mobilisation. Again the developer will weigh up what penalties he has for handover to his Clients (you guys the investors). Usually in Dubai this is Zero but some developers are offering guarantees.

You are quite right there are still apartments for sale at 750dhs/sqft in Dubai but certainly not in prestigious areas like Dubai Marina, BB, Downtown or JLT. I bought a 1 bed in the Marina at 720 a sqft 2 years ago, definately at lauch price that would be minimum 850-1000 today. Thats a difference of say 30%, so it can be seen that Developers prices are increasing in line with Materials and Labour prices.

As an example there are places in Ajman and RAK which are only 20 and 40 miles from Dubai respectively. Some developers are offering apts at 400dhs/sqft in those locations where the labour and materials are the same price as Dubai.

[DoBuy]

Thanks Wesrae.Interesting points u made especially about developments in Ajman and
RAK being offered at 400sq ft.Like u said labour and materials are the same as Dubai so obviously developers are making big profits.Where do u think is the place to buy now in Dubai?Is it too late for the Marina?I like sports city and JV but I question as to whether it will be as easy to rent here as work areas such as DSO and Media City ?

[Rammah]

Originally Posted by DoBuy

I would think their original profit margins worked out were enough to absorb an increase

In my opinion, the big developers [Ie: DAMAC] would've expected an increase and made their calculation based on that. Therefore, it's not a matter of absorbing it! If companies need to absorb these increases, it would mean that they aren't experienced enough and their project management was weak from the start, and that's not filling the end buyers with confidence.

Rammah

[Rammah]

Originally Posted by DoBuy

Thanks Wesrae.Interesting points u made especially about developments in Ajman and
RAK being offered at 400sq ft.Like u said labour and materials are the same as Dubai so obviously developers are making big profits.Where do u think is the place to buy now in Dubai?Is it too late for the Marina?I like sports city and JV but I question as to whether it will be as easy to rent here as work areas such as DSO and Media City ?

I hope you get your answer from wesrae as you directed it to him, but I thought I'll also answer as I am passionate about the IMPZ! I think it's one of the hotspots of Dubai due to it's strategic location. I'll pm you additional details about specific projects there, and if anyone else is interested, please pm me.

Rammah

i represent an Abu Dhabi based company who is seeking to relocate at least 6 staff there from Dubai

I am seeking any sized apartments from 1-bed to 4-bed in Abu Dhabi or surrounding areas, Shahama or Khalifa City areas to rent on long-term basis.

Established multi-national company as client, with requirement for more apartments in the future.

Please contact in confidence through private message.

thanks
Chessmaster