Will higher material costs make Dubai homes more expensive?

Dubai: Dubai’s construction sector is still getting the materials it needs, but the war has made procurement costlier, slower and harder to predict as developers reroute cargo, lean more on regional suppliers and adjust buying plans.

The pressure is not being felt evenly across all building materials. Cement and other core UAE-produced materials remain broadly stable, while imported and energy-intensive components are seeing more cost and delivery pressure.

“What we’re seeing is not a uniform increase across all materials, but pressure building gradually through the system,” said Dr Seyed Ghaffar, Professor in Civil Engineering and Head of Engineering Department at University of Birmingham Dubai.

“Initial disruptions to airspace and shipping affected timelines and reliability, and as the situation evolved, impacts on transport routes, energy supply, and industrial production have started to feed into costs.”

The main question for property buyers is whether higher construction costs will show up in home prices. The answer depends on the developer, the contract structure and how far the project has already progressed.

Developers are handling the pressure in different ways, from absorbing cost increases on sold units to adjusting specifications and engaging suppliers earlier for future launches.

At Samana Developers, CEO Imran Farooq said the company will not pass the increase to existing buyers because 91% of its units across various projects have already been sold.

“At Samana, we are in a specific position because the majority of our units, 91% across our various projects, have already been sold. Because of this, we bear the additional costs internally; we cannot and will not pass these increases on to our buyers,” Farooq said.

Farooq said prices of certain construction materials have increased between 3% and 22% compared with pre-war levels. Structural components such as steel have been more exposed to volatility, while some specialised finishing materials have seen more modest increases.

Ghaffar said the bigger pressure point is often delivery cost, not the base price of every material.

“For example, core materials such as cement in the UAE have remained relatively stable overall. The more noticeable changes tend to be in the cost of delivering materials, driven by longer shipping routes, higher fuel costs, and increased insurance,” he said.

That means the final cost impact depends heavily on each project’s material profile and sourcing strategy. Aluminium is one of the more exposed categories because it is widely used in façades, window systems and cladding, while also depending on energy-intensive production and complex upstream supply chains.

“Overall, it is better understood as a material-by-material effect,” Ghaffar said. “Costs are being added at different stages of the supply chain, and the final impact depends very much on the specific material profile and sourcing strategy of each project.”

With key maritime routes restricted, contractors and suppliers are using alternative corridors and more regional sourcing to keep projects supplied.

Farooq said Samana has shifted primary sourcing from China and India to Oman, Saudi Arabia and Egypt. The developer has also changed entry routes from Jebel Ali to Khorfakkan Port and Sohar Port in Oman, with materials then transported by land to Dubai project sites.

“Regarding entry points, since the Strait of Hormuz is closed, our routes have changed from Jebel Ali to Khorfakkan Port and Sohar Port in Oman. From there, materials are transported via land to reach our project sites in Dubai, ensuring the supply chain remains unbroken,” Farooq said.

Ghaffar said these route changes are keeping materials available, but they come with trade-offs.

“These adjustments keep materials flowing, but they come with trade-offs, longer transit times, higher freight costs, and increased exposure to delays. That shift in logistics is one of the main reasons why prices and procurement timelines have become less predictable,” he said.

The UAE construction market is not facing a broad shortage of materials, supported by local production, established distribution networks and the country’s ability to adapt logistics routes.

“Supply remains broadly available across the UAE, supported by strong local production and well-established distribution networks,” Ghaffar said. “Overall, the system is holding up well, with the main challenge being predictability rather than availability.”

Farooq said Samana has all the materials it needs, although some are available only at higher prices.

“While we cannot speak for the entire market, we can confirm that all the materials we need at Samana Developers are available. There is no shortage of supply, though as I mentioned, certain materials are only available at the higher price points we are currently seeing,” he said.

Local manufacturers are also carrying more of the load. Farooq said they are meeting about 70% of demand, but many still rely on imported raw materials such as polymers for construction chemicals, steel strands for post-tension slabs and billets for steel production.

“Local production is vital, but it remains sensitive to the global cost of raw components,” he said.

Construction timelines are expected to face more pressure in procurement and sequencing than from a broad market slowdown.

“The impact is more likely to be seen in timelines and risk management rather than a broad slowdown,” Ghaffar said. “Projects that rely heavily on imported or specialised materials may face adjustments in sequencing, procurement, or design.”

He said the current disruption is also pushing the sector toward more controlled construction methods, including greater use of off-site production, standardised components and locally available materials.

“One important takeaway is that this is not just a materials issue, it’s a systems issue. When transport routes, energy supply, and industrial production are all under pressure, the impact is felt across cost, timing, and risk,” he said.