Dubai’s property market has been one of the world’s strongest in recent years, leading global sales of homes worth more than $10 million, according to real estate consultancy Knight Frank. Tilal Al Ghaf includes mansions that sell for more than $15 million, as well as smaller units often purchased by investors seeking rental income.
Delays can be costly for the latter group of buyers. Many off-plan sales contracts include provisions requiring developers to compensate purchasers if handovers are delayed beyond a specified period, often six to 12 months. Invoking force majeure can allow developers to suspend those penalties.
Construction consultancy Stonehaven estimates regional building materials’ costs have risen roughly 25% since September, driven by higher prices for aluminum, bitumen, copper, and nickel. Two industry executives, speaking on condition of anonymity, said interior fit-out companies are also struggling to find fittings and finishing materials that are normally imported through Dubai’s Jebel Ali port.
A property developer, who also asked not to be identified, told Semafor that supply uncertainty, rather than a lack of financing, was the biggest challenge. Some subcontractors have declined new work or withdrawn from projects because they could not guarantee access to materials or completion timelines, the developer said. Those disruptions are extending handover schedules across the region and will likely lead to lower completion rates this year.
MAF said in a statement that it’s working with its “contractors, consultants, and suppliers to monitor developments and mitigate potential impacts,” and that its priority is “the timely and high quality delivery of homes for our customers.”
* This article was updated with a response from Majid Al Futtaim.