An expert in engineering economics, Dr. Muhammad al-Jalali, confirmed that real estate prices rose by nearly 10 percent after the rise in the prices of iron, cement and other building materials. He believed that the prices of blocks, gravel and sand would inevitably rise after the increase in the price of industrial diesel by a rate ranging between 10 and 15 percent, as the crushers work on diesel, pointing out that operating cement plants and block presses also requires diesel. He pointed out that what governs the price of the property today, in addition to costs, is the volume of demand, as well as the region.
He pointed out that it is noticeable in the market now that the percentage of new investment projects for real estate development is small due to the high costs, indicating that the overall investment has decreased, as well as investment in the real estate field with the exception of new cities such as the suburb of Al-Fayhaa and some projects of the Public Housing Corporation. He explained that the cost of one square meter of building is currently about 350 thousand pounds on average, in addition to the land, and if there are basements in the building, the cost will be greater. He pointed out that the price of one ton of cement in the private sector today is around 130 thousand, and the homeland of iron is about 1.6 million pounds.
He pointed out that a slight increase in the exchange rate during the past month led to an increase in the price of iron, as one ton at the beginning of the month was around 1.4 million, and today it has reached 1.6 million, while cement did not increase. He concluded by saying: If there is no increase in the citizen’s income level, there will be no demand for real estate in the coming days.