UAE property prices may ease in 2027 as construction costs decline, says ECC chief
Engineering Contracting Company CEO Karim Farah expects lower material costs to reduce pressure on developers, while AI and sustainable building methods could reshape the construction industry
UAE property prices could face less upward pressure in 2027 if construction material costs begin to fall, according to Karim Farah, chief executive of Engineering Contracting Company (ECC).
Speaking during an episode of the AB Majlis podcast, Farah said improvements in regional geopolitical conditions could help stabilise material supplies and bring down the cost of construction. Any reduction in building expenses could eventually influence property prices, although the extent of that impact will depend on wider market conditions.
He also expressed confidence in Dubai's long-term development prospects, pointing to the city's continued expansion and the opportunities available across the construction sector.
Farah believes Dubai still has considerable scope for growth and does not expect its development activity to slow significantly in the near future.
Material costs remain a major concern for contractors
The UAE construction industry continues to manage challenges involving material availability, labour recruitment and increasingly demanding project schedules.
Farah explained that geopolitical developments have complicated the movement of certain construction materials, encouraging contractors to place orders earlier to reduce the risk of supply interruptions.
Despite these pressures, he believes the market currently has sufficient resources to support the ongoing development pipeline.
In his view, project deadlines are among the most significant challenges facing contractors. When construction work falls behind schedule, companies may need to bring in additional workers and equipment to recover lost time, increasing overall project expenses.
Farah also noted that some developers have started accepting greater responsibility for fluctuations in the prices of materials such as steel, concrete and diesel.
Such agreements can help contractors manage financial uncertainty and avoid including excessive price-risk allowances in project quotations.
AI and robotics could change construction operations
Technology is expected to play a growing role in the UAE construction industry over the next few years.
According to Farah, artificial intelligence is already being used or explored for several business and site-management functions, including accounting, purchasing, workforce supervision and safety monitoring.
Drones, cameras and digital monitoring systems can also help companies observe construction progress and improve site management.
However, he believes the adoption of physical robots for construction activities will require further testing before the technology becomes widely practical.
ECC previously experimented with an automated plastering machine, but the equipment struggled to handle uneven surfaces and difficult areas such as corners.
The company is now preparing to test newer robotic solutions on construction sites. Farah expects administrative applications of AI to develop more quickly, while wider use of robots for manual construction work may take longer.
He added that automation should also be viewed as a way to support workers by reducing repetitive tasks and allowing employees to focus on responsibilities requiring greater judgement and experience.
Turning discarded palm waste into construction materials
Sustainability is another area receiving attention at ECC, particularly through its Desert Board manufacturing initiative.
The project focuses on converting discarded date-palm fronds into engineered boards that can be used in building-related applications.
The idea originated with Farah's father, who founded ECC in 1975 and became interested in finding an alternative use for palm waste that would otherwise be sent to landfills.
Developing the manufacturing process required years of work with a German machinery manufacturer. Farah later helped bring the project forward, including arranging financing and supporting its development. The factory produced its first board in 2021.
The process uses fronds removed during the annual maintenance of date palms rather than cutting down the trees themselves.
The company has also designed its production operations to reduce energy consumption, using electric machinery where possible and recovering production dust for use as a heat source.
Farah said ECC has patented the technology and sees potential for similar manufacturing operations in countries that generate substantial quantities of date-palm waste.
Property maintenance and refurbishment offer future opportunities
While Dubai continues to attract new development, Farah believes the maintenance and upgrading of existing buildings will become increasingly important.
As the city's property stock grows older, demand for refurbishment, repairs and improvements could create another significant area of activity for construction companies.
His comments also reflect the lessons ECC has taken from previous market cycles. Farah stressed that contractors should be careful about expanding too quickly during periods of strong demand.
Taking on more projects without having enough staff, equipment and operational capacity can create difficulties in meeting contractual commitments.
He believes maintaining financial discipline and ensuring that businesses have the resources to complete their work are essential for long-term stability.
Dubai's development outlook remains positive
Despite the challenges involving material costs, labour and construction schedules, Farah remains optimistic about the UAE's development sector.
He sees continued opportunities in infrastructure, residential construction, commercial projects and the upgrading of existing properties.
His outlook suggests that the next stage of industry growth will depend not only on the number of new developments entering the market, but also on how efficiently companies manage costs, adopt technology and deliver projects.
For the UAE property sector, any easing in construction expenses during 2027 could become an important factor influencing development budgets and future pricing decisions. However, actual property prices will also depend on buyer demand, supply levels, financing conditions and individual project characteristics.
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