By Majd Othman
KUWAIT: The huge rise in the prices of construction materials has affected building of houses, with some citizens freezing construction of their properties, while others have speeded up work over worries about further price increases. Meanwhile, the COVID-19 pandemic and increase in residency costs for workers in Kuwait has resulted in a labor shortage, leading to a huge rise in daily wages of workers.
Kuwait Times visited construction material shops to learn more about the price hikes. Abu Mohammad, a business owner, said prices of all materials related to petroleum products have increased by almost 30 percent due to the high prices of oil, shipping and raw materials. “The problem is that Kuwait doesn’t have industries related to oil derivatives, which forces us to import the materials from GCC countries, which have doubled their prices,” he said. “The labor shortage is a real problem for us and citizens too, as the daily wage for labor has risen by 20 percent.”
Taha Abu-Elneel, an employee at a construction materials company, said the increase in construction material prices started during the pandemic with only 5 percent. Today, prices have increased by more than 25 percent, and in some cases, they have doubled, as some suppliers took advantage and monopolized materials to increase prices.
Abu-Elneel said prices rose the highest before Ramadan, as workers went on vacation during this month, which increased the demand for residential construction among citizens and caused extreme price hikes. “Due to the labor shortage, the daily wage bill has increased a lot. While earlier it was KD9 per day, it has reached extreme highs of between KD18 and KD25 daily,” he said.
“New residential projects such as Mutlaa and West Abdullah Al-Mubarak highly affected construction material and labor demand in a short period, while import prices of materials have increased,” Abu-Elneel said. “Iron and wood materials are the most affected by the price hikes,” he added.
Amer Al-Sayed, manager of a construction brokerage company, told Kuwait times: “Prices of survey material increased have three times since March, while National Industries have increased prices of materials and reduced the supply to restrict 90 percent of these for new residential projects. The fees for customs clearance tripled in a very short time from $900 to $3,000 per shipment,” he said.
Hossam Ahmad, an employee at a construction company, said the main price increase is for iron materials. “The price difference reached KD70 per ton, which means for 10 tons the customer loses KD700, plus the high daily wages, which affected contractors who build for customers, who decided to freeze their construction due to the price hikes,” he said.
Abu Hamza, an employee at a construction company, said: “Import sources raised their prices and reduced the amount that is allowed to be imported of all materials. Since last month, suppliers started to reduce the iron prices as their stores are full to KD280 from KD295 per ton,” he said.
An official government source told Kuwait Times the issue of construction material price hikes is under consideration. “House owners are not affected by price hikes due to the governmental support that covers KD30,000 for materials. If the owner wants to add other material, the cost will be higher,” he said. Regarding price control, he said “the construction market in Kuwait is unrestricted over prices,” adding “it’s a competitive market – the client can choose the price that is best for them.”