DUBAI: The GCC construction industry is bracing for higher prices, with building costs across the UAE and Saudi Arabia now expected to rise even more sharply following fresh trade tariffs announced by former U.S. President Donald Trump.
These concerns come as Stonehaven releases its 2025 UAE & KSA Construction Cost Benchmarking Report, which had already predicted a 2.7% to 3.3% rise in UAE construction costs and a 3.4% to 7% spike in Saudi Arabia. However, experts warn those figures may now be underestimated.
“Materials like steel, concrete, and aluminium are globally sourced,” said Gordon Rodger, Managing Director of Stonehaven. “With over $2.3 trillion in ongoing projects across Saudi Arabia and the UAE, any disruption in material supply or cost can hit hard.”
The report outlines four key areas of concern:
- Inflation in construction costs: Prices are set to rise between 2% and 7%, driven by materials and import dependency.
- Labour pressures: Labour makes up 40% of project costs, and shortages are pushing firms to explore automation and AI.
- Tech adoption: Modular builds, AI planning, and BIM are now seen as essential to manage future cost volatility.
- Sustainability shift: Developers are focusing on carbon tracking and green certifications for both compliance and long-term savings.
In 2025 alone, Dubai will add 19,700 villas, while Saudi Arabia’s mega-projects like NEOM and The Red Sea Project are in full swing. This makes managing costs more critical than ever.
Rodger urged developers to act quickly. “The industry must rethink how it plans, builds, and spends—or face serious financial risk.”
-Agencies / CW
