Construction costs fall by 70% amid global downturn

Costs have fallen from $326 per sqft six months ago to $95 per sqft - industry insiders.
Construction costs fall by 70% amid global downturn
By Joanna Hartley
Sun 08 Feb 2009 11:21 AM

Construction costs in Dubai have fallen by more than 70 percent from their peak in August last year, it was reported on Sunday by industry insiders.

The news follows media reports that developers are in the process of renegotiating contracts to take advantage of drops in the price of raw materials, prompted by the global economic crisis.

Previous esitmates had out the fall at 30 percent but according to UAE daily Emirates Business costs have now fallen by 70.83 percent, from AED1,200 ($326) per sqft six months ago, to around AED350 ($95) per sqft now.

"The cost has gone down to between AED400 and AED600 per sqft with some areas going as low as AED350,” said Imad Al Jamal, of the UAE Contractors Association.  

“We are only talking about core and shell and not looking at the finishes," he added.

Meanwhile, Matt Cronje, chief development officer at Schon Properties, revealed he was in the process of negotiating a new deal at the lower price.

"We are looking at construction prices ranging between Dh270 and AED300 per sqft in general. It is now a developer's market," he added.

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