Oman one of world's two countries to see construction costs decline
Oman is one of only two surveyed countries in the world where the cost of construction is declining, a new report has found
Muscat is one of only two markets in the world to see a drop in construction cost, according to Turner & Townsend’s survey of 46 markets.
Building costs in Muscat declined by 1% during the last 12 month, largely due to a “flat real estate market”, according to Turner & Townsend’s International Construction Market Survey 2018.
Muscat and Perth (Australia) were the only two surveyed markets to record a decline in the cost of construction. Many other markets recorded a single-digit increase, with costs in the UAE rising 2%.
It is $118 (OMR45) cheaper per square metre to build in Oman than it is in the UAE.
Whilst the average per square metre cost of construction in Muscat is $1,337 (OMR514), the average cost in the UAE is $1,455 (OMR559; AED5343).
The most expensive cites in the world for construction were New York, San Francisco, Hong Kong, Zurich, and London.
Locations with the lowest construction costs were Bangalore, Beijing, Ho Chi Minh City, Istanbul, and Nairobi.
A decline in the cost of construction in Muscat may be short-lived, as Turner & Townsend analysts expect costs to rise by 1% between 2018 and 2019. This means the market will remain relatively stagnant.
Oman is attempting to control public spending and increase its non-oil revenue streams. But despite natural gas production at the Khazzan field set to start this year, following the opening of the new Muscat International Airport, the country’s budget for development is down 17% from last year, Turner & Townsend said.
Investment from the private sector should offset this fall, though.
There is “strong private sector interest” in a $2.6bn (OMR999m) railway project to be built to carry limestone from Shuwamiyah, Turner & Townsend said.
Oman’s government has reportedly granted rights to unnamed Chinese companies to work on unspecified industrial projects worth $3bn (OMR1.1bn) altogether.