The cost of personal construction increased by 30% during the past 4 months due to 4 main factors, most notably the increase in raw materials and the scarcity of labor. While the construction price amounted to 1350 riyals per flat meter, compared to 1,000 riyals previously, contractors attributed this to the changes that occurred in the contracting sector, most notably the application of the building code and mandatory insurance on construction defects in residential buildings since last July, the high prices of raw materials and the scarcity of trained and qualified workers due to Corona pandemic. These simultaneous developments also led to a 50% drop in demand for personal construction, and real estate owners waited for market stability and lower prices.
Most of the contractors went to the restoration work, expecting a gradual decrease in prices during the coming period as a result of the return of the economic movement, the possibility of bringing in trained and qualified workers, and absorbing the changes that have occurred in the sector recently.
The former Vice Chairman of the Contracting Committee at the Jeddah Chamber – Raed Al-Aqili confirmed that the cost of personal construction increased by up to 30%, after the price reached 1,350 riyals per flat meter, while it was previously 1,000 riyals.
He pointed out that the market is witnessing many variables, including the rise in the prices of raw materials and insurance against construction defects, which raises the cost to 30%, and suffers from a scarcity of trained and qualified labor, which increases construction costs, noting that these variables led to a somewhat slowdown in new construction. And the majority of contractors went to repair work.
Contractor – Abdulaziz Minshawi estimated that the cost of personal construction increased by 25-30% during the past 4 months, due to the rise in raw materials globally, and the scarcity of qualified labor due to the Corona pandemic, in addition to the recent changes in the contracting sector, which led to weak demand. On personal construction and waiting for realtors to stabilize the market.
He expected prices to drop gradually during the coming period, as a result of the return of economic movement, the opening of airports and the possibility of bringing in qualified workers, and containing the repercussions of changes in the sector.