Construction projects across the UAE have continued without major delays despite a sharp rise in imported building material costs, according to a new report from Moody’s Ratings. The agency said developers have managed to keep work moving even as global supply chains faced pressure from regional tensions.
The report found that imported construction material costs have increased by about 20 to 25 percent since disruptions began affecting shipping routes in the Gulf. Even with higher prices, most large projects have remained on schedule because developers prepared in advance and contractors absorbed much of the added cost.
Regional conflict has disrupted shipping through the Strait of Hormuz, one of the world’s busiest trade routes. The situation raised concerns that delays in deliveries could slow construction across the UAE. However, Moody’s said the property sector has shown stronger resilience than many analysts expected.
The agency noted that developers have benefited from fixed-price construction contracts and early purchasing agreements. These measures have protected many companies from sudden increases in material prices. As a result, profit margins and cash flow are expected to remain largely stable over the next year.
According to the report, contractors are carrying most of the burden from higher material costs. This has allowed developers to continue building projects without making major changes to their financial plans or construction schedules.
Moody’s said supply chains have also adapted quickly. Instead of relying mainly on routes through the Strait of Hormuz, companies have redirected shipments through ports in Oman, Saudi Arabia, and the UAE’s East Coast. Although these new routes have increased transport times and made logistics more complex, they have helped keep materials flowing to construction sites.
The report added that strong planning has played an important role in limiting disruption. Developers have maintained enough stock of key materials while adjusting procurement strategies to meet changing conditions. These actions have reduced the risk of work stopping because of supply shortages.
Moody’s said conversations with rated companies showed that construction activity continues largely as planned. Inventory levels remain healthy, contractors continue to absorb much of the cost increase, and developers are focusing on preserving liquidity during the period of higher expenses.
The report highlighted different business models used by major UAE developers. Companies such as Emaar Properties, Aldar Properties, Damac Real Estate Development, and Arada mainly depend on outside contractors to complete projects. Meanwhile, Sobha and Binghatti have integrated or closely connected construction operations that give them greater control over purchasing materials and managing project delivery.
Having direct control over construction allows some developers to respond more quickly to supply chain changes. It can also improve purchasing decisions and reduce delays when materials become harder to obtain.
Moody’s said most developers normally keep enough inventory of important imported materials to last between two and six months. This stock provides valuable time to find alternative suppliers or adjust delivery routes when disruptions occur.
The report explained that developers often increase inventory levels as projects move closer to completion. This approach helps ensure that small but essential components arrive on time and do not delay final handovers. In many cases, buildings are completed several months before buyers officially receive their properties.
Because of these preparations, many developments scheduled for delivery through the end of 2026 had already secured the materials needed before shipping disruptions became more severe. Others were already close to completion, reducing their exposure to supply chain risks.
The report also noted that many basic construction materials continue to come from within the UAE. Concrete, steel, aluminum, and ceramic products are largely supplied by domestic manufacturers. This local production has helped reduce the impact of international shipping challenges.
Some imported products remain more vulnerable to global supply disruptions. These include elevators, air-conditioning systems, mechanical, electrical and plumbing equipment, lighting products, wood joinery, natural stone, and interior furnishings. Even so, developers have been able to manage these challenges through careful planning and diversified supply networks.
Timely project completion remains important for developers because a significant share of customer payments is received when properties are handed over. According to Moody’s, developers in Dubai and Abu Dhabi usually collect about 20 to 40 percent of the total sales value at completion. In Sharjah, the final payment is generally around 60 percent of the property’s value.
Moody’s concluded that the UAE’s construction sector has remained stable despite rising costs and supply chain pressures. Strong inventory management, flexible shipping strategies, local material production, and sound financial planning have helped developers continue delivering projects while maintaining confidence in one of the region’s most active real estate markets.
