Construction costs up 12% in 2026, pushing custom build prices higher

Construction cost inflation has re-emerged as a significant factor in Dubai's luxury villa market, with bespoke build costs rising approximately twelve percent year-on-year through Q1 2026. The increase, driven by skilled labour shortages and imported material costs, is affecting the economics of custom builds in Emirates Hills, Palm Jumeirah, and select Dubai Hills plots.

Cost breakdown

• Skilled labour: Up 15% as demand outstrips supply for high-end finishing trades.
• Imported materials: Up 8–10% due to shipping costs and currency movements.
• Local stone and marble: Up 6%, constrained by quarry capacity.
• Smart home and MEP systems: Up 12%, driven by technology upgrade cycles.