New crisis threatens housing projects

New crisis threatens housing projects
Updated 13 September 2013

New crisis threatens housing projects

New crisis threatens housing projects

Obstacles to importing building material, especially from Turkey, is developing into a new crisis threatening real estate projects in the Kingdom. The threat emerged at a time when the Ministry of Housing plans to build around 40,000 homes and 500,000 low-cost homes to solve the country’s pressing housing problem.
Many contractors have said that building material prices have increased 20 percent. They face transportation obstacles to import iron from Turkey to the Kingdom by land. Syrian authorities currently do not allow the crossing of Turkish trucks.
There are many iron factories that want to increase their productivity, but they face problems importing essential material for the iron industry in the Kingdom.
Abdullah Mussaed, a general manger at a building materials company in Dammam, said: "Transportation by sea is very expensive. Most building material companies and factories in the Kingdom prefer to transport material by land. However, there are many difficulties in importing building material from Turkey by land."
"The high prices of construction material are not limited to the Saudi market alone. There is a global phenomenon of high shipping prices. There are consumers demanding that the Ministry of Trade and Industry intervene for controlling rising prices," he told Arab News.
The price of building material plays a big role in determining the price of housing units. Real estate experts expect apartment construction for low-income families to stop because of this instability, as well as the volatile prices of building material and rising wages in construction. The price of construction has increased from SR95 to SR130 per meter.
The price of building materials increased by 10 to 20 percent due to a high number of construction projects in the Kingdom, according to a local newspaper.
Saleh Al-Said, a member in the Real Estate Committee of the Eastern Province Chamber for Commerce and Industry, said: "The high prices of construction material are an indication that traders in the Saudi market need to build smart houses."
He added that there is an increase in demand and a lack of supply of housing units due to the high prices of building material in the summer. There are also fears that the prices of units will increase further.