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Contractors and real estate professionals call for an urgent solution to the phenomenon of loose labor and unapproved contractors

Building Materials Prices
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Emlak Real Estate

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According to an Amlak survey... Experts confirm that construction costs are in line with real estate prices...

Survey—Mohammed Al-Amin Jamous

The prices of building and construction materials play a fundamental role in driving real estate development and construction projects, especially under an open-market policy. Prices for these materials vary, and supply and demand fluctuate, Amlak Real Estate Newspaper surveyed a number of interested parties, experts, and contractors regarding current construction material prices and their impact on the reality of real estate market, with several of them calling for an urgent solution to the issue of unregistered labor and the elimination of unlicensed contractors, emphasizing that current construction prices are in line with real estate prices.

Future Rise in Construction Material Prices

Amlak began its survey with contractor Marwan Fawzi, who noted that the contractor’s «manufacturing» costs are reasonable and acceptable, and that there is competition among contractors due to the projects being launched in various regions of the Kingdom, whether private projects or those undertaken by the Ministry of Housing.

Fawzi explained that the prices per square meter are as follows: 360 to 400 riyals per square meter for materials and structural work, and 800 riyals per square meter for finishing; for average-quality finishing, the total comes to half a million riyals.

He predicted that prices for construction materials as well as «contractor labor» will rise in the future as a result of the current construction boom in the Kingdom, He also called for urgent solutions to the issue of informal labor in the construction market, as well as to the problem of unlicensed contractors.

A decrease of 15%

Contractor Atef Hussein (Al-Afq Contracting Company) explained in a recent interview with » Amlak» that there is currently a general decline in construction costs, which have fallen by approximately 15%. There is also a decline in the prices of local building materials, and we can say that their prices are competitive and reasonable, commensurate with real estate prices. Regarding the prices of rebar and steel, he explained that they are around 2,400 riyals, concrete at 150 riyals, while finishing costs have decreased by approximately 15%.

Contractor Atef Hussein predicted that construction prices in general will rise in the future if more projects continue to be launched, as this will lead to higher prices for «manufactured materials,» labor, and construction materials.

Manufacturing and Real Estate Are Suitable

For his part, contractor Abdulaziz bin Mubarak acknowledged the decline in construction costs in the contracting market, explaining that the cost of structural work is 500 riyals per square meter, manufacturing costs at 130 riyals per square meter, and turnkey delivery at 1,100 riyals. He noted that the prices of building materials and prefabricated housing are in line with current real estate sales prices, which are also experiencing a decline—a trend that certainly serves the public interest, He noted that the Ministry of Housing’s launch of a number of housing projects and its involvement of various contractors and developers in these projects serves the public interest, as it will create more options for citizens to choose suitable housing.

Supply and Demand

For his part, contractor and real estate marketer Fahad Al-Hazaa affirmed that prices in the construction market are currently very reasonable overall, noting that the base price ranges from 300 to 350 riyals per square meter, and the turnkey price ranges from 800 to 1,250 riyals per square meter, depending on the quality of finishes requested by the customer. Regarding the reasons behind the price increases, he said this is due to high demand coupled with low supply.

Regarding the large number of projects under construction and whether they affect demand for building materials, Al-Hazaa explained that their impact is minimal and does not affect the market,  because prices rise and fall in both buying and selling in line with market and material prices.

The First Female Contractor

Meanwhile, contractor Umm Masha’el of «Fas Al-Almas General Contracting Company» said: "I am the first female contractor in the Kingdom of Saudi Arabia, and you must support women. I also hope that SABIC, Aramco, and SKEKO will consider Saudi contractors rather than relying on foreign companies."

In her interview with Amlak, she noted that construction market prices have risen by 3%, but only for materials; however, this varies depending on the land area and the region, as price differences depend on the region. She said: "A street contractor charges one price, while a licensed contractor charges another; ultimately, the house built by the unlicensed contractor is substandard. Anyone who wants to build a house must have the municipality find a solution and approve a licensed contractor," She denied that the large number of projects under construction has an impact on the demand for building materials, stating, "The more projects there are, the more the economy grows. Of course, we have been greatly wronged due to unskilled labor and the defamation of the reputation of certified Saudi contractors."

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