Bahrain has been named as the Middle East’s most expensive country to build and appears in the top twenty list of the most expensive countries across the globe, according to the annual International Construction Cost Report released today by built asset consultancy, EC Harris.
According to the survey, which benchmarks the cost of building in each country against the UK, the price of construction in Bahrain is the same as in the UK, and 6% greater than in Qatar, their closest Middle East neighbour on the list.
Qatar finished in 15th position overall with construction costs more expensive than larger nations including the US, Russia and China.
“With the 2022 FIFA World Cup now confirmed, Qatar could soon emerge as the most expensive place for construction in the Middle East particularly if there is any misalignment between supply and demand in the short to medium term,” said Nick Smith, regional head of cost and commercial management in the Middle East.
“This is likely to be a slow burning process though as whilst ambitious programmes of work are being discussed, it will take a while before construction work actually begins.”
The United Arab Emirates completed the top three of the most expensive countries in the Middle East in which to build, with construction costs deemed to be 9% cheaper than in Bahrain and 3% lower than in neighbouring Qatar.
Oman finished in fourth place overall when ranked against other countries in the region, and just made it in to the top twenty list with construction costs that were 11% below the baselines figures set by Bahrain and the UK. Perhaps surprisingly Saudi Arabia emerged as the cheapest country in the Middle East when it comes to construction, finishing 17 places below Oman and in 37th place overall.
The figures revealed that it was almost half as expensive to build in Saudi Arabia as in Bahrain whilst the Kingdom was 37% and 34% cheaper when compared to Qatar and the United Arab Emirates.
“The Saudi market has traditionally been the most competitive market for contractors, resulting in lower overhead and profit allocations than in the UAE or other GCC countries. Furthermore, the abundance of available raw materials and steel factories also play a significant role in keeping construction costs lower, with the price of key commodities like steel and concrete typically 10% lower than elsewhere across the region,” Smith added.
The research also noted that inflationary pressures are expected to be very similar in the UAE and Saudi Arabia, although global energy demand could mean inflation is significantly higher in Qatar.
By mid 2012 construction costs across the GCC may be very different to historic performance, with KSA prices rising at a sustainable pace and prices in Qatar reaching similar levels to those witnessed at the end of 2007.
The global report found that overall Switzerland was the most expensive country in which to build with costs over 70% higher than in Bahrain and the UK. Europe dominated the top eight with Australia the only non-European countries that made it in to that list.
Highest construction costs in Middle East
| Middle East Ranking | Global Ranking | Country |
| 1 | 12 | Bahrain |
| 2 | 15 | Qatar |
| 3 | 17 | UAE |
| 4 | 20 | Oman |
| 5 | 37 | Saudi Arabia |