The current economic changes led to fluctuations in the building and construction markets during the last quarter of 2016, which affected the construction price map, which decreased significantly, as contractors attributed this change to the stagnation in the market for construction raw materials, which reached 40%, according to them.

Lower construction cost 35%

In this context, investors and contractors confirmed that the price of construction fell to about 1000 riyals per flat meter, while the price was previously about 1500 riyals per meter, This was automatically reflected in the decrease in the cost of building residential units by 35% during the last quarter of 2016, while contractors attributed this decrease to several reasons, primarily the decrease in the prices of raw materials for construction by up to 40%, in addition to the recession currently witnessed by the construction sector, taking into account the positive reaction to the decision to impose fees on white lands, which was previously about 1,500 riyals per meter. The positive reaction to the decision to impose fees on white lands, which led to a decrease in land prices on the outskirts of major cities, adding that the decrease in construction costs contributes to the increase in the construction of residential units and villas that suit the needs of citizens, as well as the acceleration of housing projects and the recovery of the construction sector.

Positive indicators for housing prices

For his part, Abdullah Radwan, Chairman of the Construction and Building Committee at the Jeddah Chamber, said that the recession in the contracting sector comes due to the decline in oil prices, which contributed to the decrease in demand for raw materials for construction such as bricks, cement, ready-mix concrete and iron, in addition to the decrease in the total sales of these materials during the previous four months, explaining that prices are determined by supply and demand in addition to the specifications required by the customer.
Raed Al-Aqili, former vice chairman of the Jeddah Chamber's contracting committee, said that the decrease in the prices of building raw materials and reducing the cost of construction would contribute to increasing the construction of housing units that suit the needs of citizens, in addition to accelerating the pace of housing projects, adding that most raw building materials companies have started selling their products at less than the specified price and stopping some production lines to dispose of their surplus quantities, especially since these materials are not suitable for long-term storage because they are affected by weather factors.

Reduced demand for building materials

Contractor Abdulaziz Menshawi said that the decrease in the cost of construction for residential units reached 35% during the last quarter of this year, explaining that the construction price reached 1000 riyals per flat meter, while its price was previously about 1500 riyals, explaining that the decrease is due to the decrease in the prices of primary building materials, in addition to the recession in the construction sector in the current period, and the decrease in land prices in the outskirts of the main cities, pointing out that the decrease in construction cost contributes to increasing the construction of residential units and villas that suit the needs of citizens, in addition to accelerating the pace of housing projects and the recovery of the construction sector in the.

Contractor Abdullah Al-Sahli added that the decrease in demand for construction materials by 20% is due to the recession in the Kingdom's construction sector, the impact of raw materials on global prices, in addition to the decrease in the proportion of private and individual projects, and citizens waiting for the decline in raw land prices, which contributed to the decrease in the prices of these materials by 40% over the past four months.