Housing and Construction Cost Escalation: A Case Study Focused on Saudi Arabia

Housing and Construction Cost Escalation: A Case Study Focused on Saudi Arabia
focus on evaluating the factors that are expected to impact the construction cost by gathering data from surveys with construction companies. The factors that the survey will investigate are

1) Escalation Oil Prices: The increase in global demand for oil which leads to the escalation of oil prices.

2) High Demand for Housing and Construction: This category includes high demand from, a) Saudi citizens, b) government housing projects, c) government public works projects.

3) Low Supply for Housing: This category includes the increase of annul demand for housing units comparing to the low supply of housing units, and the poor construction productivity.

4) Rapid Rise in Population Growth: This category includes the high growth rate of Saudi population with more than 3%.

5) Shortage of Construction Resources: This category includes, a) manipulation and monopoly of suppliers of cement, steel and other construction materials, b) lack of trained labor, c) black Market, d) export construction materials outside of Saudi Arabia.

6) Speculative Purchase of Undeveloped Lands: This category includes corruption in selling undeveloped lands.

7) High Inflation Rate: This category includes the continuous increase in constructions materials regarding the inflation factor.

8) Other Factors, such as: the absence of the government’s role in monitoring prices, corruption in monitoring government projects, and contractors taking projects beyond their capacity.




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