Qatar has taken out the dubious honour of being the most expensive market in terms of the cost of building and construction materials in the Gulf region on the back of strong construction activity in the lead up to the 2022 FIFA World Cup and high prices for concrete and rebar, a new report says.
In its Third Quarter Construction Costs & Outlook Report, Middle Eastern business intelligence services firm MEED has reported that overall building materials costs in Qatar are higher than those in the United Arab Emirates (UAE) and Saudi Arabia by 12 per cent and 4.5 per cent, respectively.
Compared with the UAE, the report says the average rate per tonne of rebar in Qatar is 32 per cent higher, concrete costs 28.6 per cent higher and the price of a 50-kilogram bag of cement is 3.5 per cent higher.
Emil Rademeyer, general manager of MEED Cost Indices (MCI), says the relatively high price of materials in Qatar compared to elsewhere in the gulf reflects strong demand conditions and the expectation of an impending boom in construction spending.
Qatar is expecting a construction boom over the next decade as the government spends around US$100 billion on buildings and infrastructure in the lead up to the World Cup. The money will go toward high profile mega projects across tourism, transportation, health, education and housing, including a $25 billion metro and rail network, a $10 billion airport and a $7 billion deep water seaport.
While the anticipated strength of activity is welcome, there are persistent fears about a blowout in costs of labour and raw materials as these projects precipitate further deterioration in existing demand/supply imbalances.