Doha named most expensive MidEast city for construction costs

Jeddah and Dubai also in global top 20, says Arcadis which adds GCC region still benefiting from cheap labour
Construction worker. (Karim Jaafar/AFP/Getty Images)
By Staff writer
Fri 08 Jan 2016 10:18 AM

Doha has been named the most expensive city in the Middle East for construction costs in a new ranking published by Arcadis, the global design and consultancy firm.

The Qatari capital was ranked 12th most expensive in the world behind New York, London and Hong Kong, Arcadis said.

It added that Saudi city Jeddah and Dubai also featured in the global top 20 for construction costs at 16th and 18th respectively.

The index, which analyses the relative cost of construction across 44 major cities, found that the local labour markets and resource availability have positively benefited cities in the GCC.

The findings also underlined the impact of strong currency performance and the fall in the price of oil in the Middle East.

Ian Williamson, buildings global business leader at Arcadis in the Middle East, said: "Throughout 2015, the global construction market saw the overall level of cost inflation restricted due to the drops in commodity prices. Particularly when it comes to oil, growing uncertainty over prices will inevitably have a short to medium term impact on the GCC construction industry.

"The region's major commercial centres of Doha and Dubai remain - for the time being, at least - relatively stable locations for developers, benefiting from access to inexpensive labour and energy."

In the Gulf region, Doha's position as a major world city will progress quickly over the next decade while Dubai remains a major regional hub, he added.

Over the next 10 years in Doha, $150 billion is expected to be spent on the like of roads, railways, stadiums and ports, as well as hospitality and social infrastructure. Moreover, the country has plans for further investment in transport infrastructure, water and electricity by 2020.

Williamson added: "As we enter 2016, it is fair to say that we have another challenging year in prospect for the construction industry. With the steep fall in the price of oil, the timing of investment programs across the Middle East has become uncertain.

"Declining commodity prices, low labour rates and a highly competitive Middle East construction market have given rise to more potential opportunities across newly-affordable markets. It is a good time for government, funders and developers to capitalise on their investment ambitions."

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